Changes to inheritance tax announced in the 2024 Autumn Budget have become the single biggest worry for advised clients, overtaking the longstanding fear of running out of money in retirement, according to FT Adviser. The finding comes from a new report by BNY Investments based on research surveying more than 200 financial advisers and 260 clients aged 55 and over.
The report, Retirement Advice in the UK: Turning Insight into Outcomes, found that 48 per cent of advisers said inheritance tax changes now led the list of client concerns.
Previous surveys carried out in 2019, 2020, 2021 and 2024 had consistently placed running out of money as the top worry. Pension taxation concerns have now pushed that into second place.
Nearly three quarters of advisers said they planned to change their advice approach in relation to inheritance tax over the next 12 months.
Gerald Rehn, head of EMEA distribution at BNY Investments, told FT Adviser: “We have statistics now that highlight the changes to IHT and what advisers are doing in the light of the FCA’s Review and policy decisions. We can see advisers are already looking at their advice processes and starting to shape these for the future.”
He added that while running out of money remained an important concern, advisers have had to react quickly to regulatory and policy changes.
The report also highlighted growing complexity around pension planning. The shift from defined benefit pensions to defined contribution schemes means individuals now bear more responsibility for their own retirement income. Yet understanding remains low. Only 35 per cent of advised clients said they would feel confident managing their pension on their own.
Heather Hopkins, founder and chief executive of NextWealth, which carried out the research, said: “The role of the adviser as interpreter, guide and steadying presence matters more than ever.”
For those navigating an estate for the first time, the key takeaway is straightforward. Tax rules around pensions and inheritance are changing, and professional guidance — whether from a financial adviser or a probate specialist — can help you avoid costly mistakes during an already difficult time.