Advisers are anticipating an increase in their workload over the next 18 months as clients grapple with pension inheritance tax changes, according to Standard Life.
More than three quarters (77%) of advisers expect their workload to rise ahead of April 2027, with an average increase of 20%. Advisers estimate that around 40% of clients require a review of their existing plans.
The change, announced in last year’s Budget, will see unused pensions become part of a person’s estate for inheritance tax purposes in an effort to discourage pensions as a wealth transfer tool.
Nearly eight in 10 (76%) advisers say their clients are concerned about the upcoming changes and 30% report that these concerns are very high.
For clients in the accumulation phase, concerns are focused on decisions about pension contributions, Standard Life said. Nearly half of advisers (48%) surveyed say clients have asked whether they should reduce or stop contributions, with a further 38% of advisers expecting additional queries around this in the near future.
For clients in decumulation, the pension fund itself is their biggest concern, with the changes leading advisers to reassess retirement strategies and explore alternative solutions.
Warren Bright, head of retail intermediary and private client distribution at Standard Life, said: “The aftershock of the 2024 budget announcement continues to be felt across the pensions industry as the reality of pensions coming into scope of IHT from April 2027 sinks in. What might appear to be a simple change is far from straightforward and advisers are at the sharp end, supporting their clients through the change.
“It’s clear from our research that advisers have an uphill challenge reviewing financial plans and making adjustments for those affected before the implementation date.”
Bright said the long-term effect on saving behaviour remains uncertain but warned it would be “disastrous for the financial health of generations of savers” if this change discourages them from pension saving.
Standard Life said the change will also prompt a change in adviser behaviour, with more than half (57%) of advisers saying they need to refresh or improve their knowledge on alternative strategies. Trusts, onshore and offshore bonds, gifting and annuities are all expected to increase in popularity.
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