The vast majority of financial advisers are concerned about pensions falling within the scope of inheritance tax, new research from Quilter has shown.
A survey of more than 770 advisers found 95% are concerned about the changes, with almost half (45%) describing themselves as extremely concerned.
The impact is expected to be widespread, with advisers expecting two thirds (66%) of their clients to be affected and in need of IHT advice, up from 52% earlier this year.
Quilter said bringing pensions into the IHT and income tax system, which comes against a backdrop of significant fiscal change including frozen thresholds and cuts to capital gains tax, will add further complexity for those planning later life and intergenerational wealth transfer.
Many advisers believe clients will need more structured estate planning, including exploring different wrappers and trust options to protect family wealth. More than nine in 10 (93%) say planning for the pension and IHT changes is now a top priority, while 90% want more support around trusts and wider estate strategies.
Roddy Munro, head of technical sales at Quilter, said: “Bringing pensions into the ambit of IHT has changed the rules of the game for retirement and estate planning. For years advisers have helped clients build pensions that could provide support both in later life and for loved ones when they are gone. The shift to bring pensions within IHT means those long-held assumptions need to be revisited and strategies adapted in good time.
“People want to feel confident that their hard-earned wealth will benefit their families rather than be lost to avoidable tax. Advisers are stepping up to provide that reassurance and are looking for the right guidance and tools to help determine where wealth should sit and in what wrappers going forward.
“By acting early, advisers can demonstrate real value and help clients protect their future choices. We are committed to supporting them through this change with clarity, strong technical expertise and practical solutions.”
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