Later life advice needs to evolve with an increased focus on women and ongoing advice, says Key Equity Release.
The inclusion of unused pensions in estates from next April is estimated to affect 49,000 estates in the 2027/28 tax year, with 10,500 of them having an inheritance tax bill they would not have otherwise faced and the rest paying more in inheritance tax than previously.
Key says the changes present an opportunity for advisers to demonstrate the benefits of holistic advice, including the use of property wealth, and ensure women are included in estate planning earlier as they are most likely to be the final estate owner.
According to official data women have a greater life expectancy than men. At birth women can expect to live to 83 while men can expect to live to 79.1 and at 65 that rises to 86.2 for women and 83.7 for men.
The equity release adviser says the value of advice and the need to consider all options becomes even more important following the death of a spouse as decisions taken will help to minimise inheritance tax implications and enhance retirement planning.
Government data shows female-owned estates already pay more than half (52%) of total IHT receipts and 56% of IHT receipts are paid from estates owned by surviving civil partners or those who have been widowed.
Will Hale, CEO of Key Equity Release, said: “The inclusion of unused DC pension funds in estates has upended IHT and estate planning with advisers and clients having to revise strategies in both the accumulation and decumulation phases along with considerations around intergenerational wealth transfer.
“The change is highlighting the importance of spouses being included in the advice process and the need for explicit discussions on the planning approach to be followed after the death of a partner. There needs to be a focus on ongoing advice for the surviving spouse to ensure the plan remains on track and any IHT implications are minimised.
“Advisers should be including all assets, including the home, in retirement planning and offering all options to clients. Wealth managers and IFAs should consider referrals to trusted specialists in situations where their own qualifications or scope of advice may limit access to products such as modern lifetime mortgages.”
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