Financial advisers have cited cuts to Inheritance Tax breaks and allowances as their clients’ biggest concern ahead of the Budget, with 57% saying it was uppermost in clients’ minds, according to a new survey.
Nearly half of advisers (47%) said a cut to the tax free pensions cash lump was of major concern to clients and nearly 40% said clients were worried about a wealth tax.
The key concerns highlighted by the AJ Bell survey, carried out among 223 advisers earlier this month:
- 57% cited further cuts to inheritance tax (IHT) breaks and allowances as clients’ biggest concern
- 47% said a potential cut to the maximum pension tax-free cash lump sum worried clients
- The introduction of a wealth tax (39%), rises in income tax or National Insurance contributions (36%), and a reduction in pension tax relief (27%) made up the top five concerns
- As many as 87% of advisers said IHT threshold freezes and the inclusion of unused pensions in IHT from April 2027 were the biggest “pain points” for clients in the current environment
Chancellor John Healey will reveal his inaugural Budget on 28 October and has so far remained tight lipped on what it may contain.
Rachel Vahey, head of public policy at AJ Bell, said clients have been “clobbered” in recent years by tax changes and remain wary about what comes next.
She said: “Advisers have been straining to hold back a surging tax tide in recent years. Under successive governments, clients have been clobbered by cuts to tax-free allowances, hikes to tax rates and newfangled tax changes entrenching more complexity into an already creaking system.
“Unsurprisingly, further action on IHT is currently the biggest concern for advisers and clients ahead of the Budget. Since announcing at the 2024 Autumn Budget that unused pension funds would be included in IHT calculations, the government has drip-fed details of how the new process will work in practice. It’s becoming ever clearer it has settled on a route that causes admin distress and heaps mountains of pressure on personal representatives (PRs) after they lose a loved one.
“This is despite widespread condemnation of the chosen process from the pensions industry and elsewhere, as well as multiple suggestions of far better ways to administer the policy without subjecting PRs to more paperwork, more complexity and more cost at an already difficult time.”
She said the concerns about what the Budget may hold have, in recent years, led to many clients moving money to avoid risk, with speculation around the fate of pension tax-free cash triggering around £14 billion in excess withdrawals in 2025.
• AJ Bell surveyed 233 financial advisers attending AJ Bell’s Great Wrapper Reset Tour across 10 UK locations between 7 and 22 September 2026.