Pension Freedom 'Driving Inheritance Tax Advice Boom'

25 July 2016

  • Nearly two out of three advisers say clients are changing their retirement plans to benefit from the recent abolition of death tax on selected defined contribution pension schemes
  • Half of advisers have seen a rise in enquiries about switching from final salary schemes to improve inheritance planning

Pension freedoms and rising property prices are helping to drive a boom in inheritance tax (IHT) planning advice with advisers seeing a surge in enquiries, exclusive new adviser research from Prudential1 shows.

Nearly two out of three advisers (64 per cent) say clients have changed retirement plans due to the abolition of the death tax, while half (50 per cent) are seeing increases in enquiries about switching out of final salary schemes2, in order to take advantage of the new flexibility afforded to DC schemes.

Prudential’s study shows around one in three (33 per cent) advisers report a rise in enquiries from clients about inheritance tax planning in the past year and more than half (52 per cent) expect demand for IHT advice to rise over the next 12 months. On average 15 per cent of clients are currently actively seeking IHT advice.

However, more clients are being caught in the inheritance tax trap with Government figures3 show receipts are set to hit a record high of £4.6 billion in the 2015/16 tax year, up 21 percent on the previous year’s £3.8 billion. This growth in payouts to the tax man is driving new
business opportunities for advisers even higher.

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