Royal London has launched a new estate and inheritance planning framework to help adviser firms prepare for the upcoming changes to inheritance tax.
From April 2027, most unused pension funds and pension death benefits will be brought within the scope of inheritance tax.
Royal London said its new framework will help advisers identify clients who may be affected by the reforms and take a more structured approach to family wealth and estate planning.
The framework forms part of a wider suite of adviser support, alongside implementation resources and practical tools designed to help firms prepare for the reforms and embed effective estate planning processes within their advice propositions.
Ken Scott, lead proposition actuary at Royal London, said: “While inheritance tax remains a consideration for a minority of estates overall, the proportion of an adviser’s clients impacted is likely to be much more significant because many have built up substantial pension wealth alongside other assets subject to IHT.
“Since Pension Freedoms were introduced in 2015, pensions have played an important role in passing wealth between generations. These reforms are prompting advisers to rethink how their clients’ pension fits into their wider plans for passing wealth to future generations.”
For advisers, this will mean identifying clients who may be affected, reviewing beneficiary nominations, retirement income strategies and existing estate planning arrangements, and helping families understand the practical implications of these changes, Scott said.
“It’s also likely many advisers will assume a more active role in record-keeping and the subsequent estate calculation upon the death of a client. Advice will always be personal to the individual client, but the processes that sit behind that advice need to be structured and repeatable. The framework provides firms with a practical example of how they can build those processes, adapting them to suit their own business and client proposition,” he added.
The support suite also links with Royal London’s Personalised Client Review Service, helping firms identify pension and ISA clients whose circumstances may warrant a review ahead of the reforms.
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