Financial Planners and advisers are getting ahead of the impending levy of inheritance tax (IHT) on unused pensions from April next year by using options such as tax wrappers, lifetime gifting and earlier drawdown.
Research from Scottish Widows reveals nearly six in ten (57%) advisers say their clients are uncertain about pensions being subject to IHT from April 2027.
In response more than half (55%) say they are recommending lifetime gifting strategies to clients, while 49% are encouraging an earlier drawdown of pension assets.
A similar number (51%) are reviewing clients' retirement income and spending assumptions.
Around a third (32%) say they have suggested the use of alternative tax-efficient wrappers such as ISAs while a few more, 37%, are advising clients to use trusts or onshore bonds. Nearly a fifth (18%) have also recommended the use of family investment companies.
Nearly half (48%) of Financial Planners and adviser say they see the tax change as an opportunity to initiate earlier family conversations around intergenerational wealth planning.
Jenny Davidson, intermediary wealth director at Scottish Widows, said: “Next year's shake up represents perhaps the biggest change we’ve seen to pensions since pension freedoms, but one that advisers are already getting well ahead of, according to our research.
“Any sizable landscape shift like this offers advisers an opportunity to demonstrate their value and engage with wealthier clients. Those advisers who act early and help guide clients through this process will reap the long-term benefits of closer relationships and greater trust.”
• Research in Finance surveyed 200 financial advisers based in the UK. The survey was carried out between 21 July – 7 August 2025