Independent financial advisers (IFA) are concerned about pensions coming into scope of inheritance tax (IHT) and income tax for deaths occurring after 75 from April 2027, a survey from Quilter has shown.

It found that 95 per cent of advisers were concerned, including 45 per cent who said they were extremely worried about the changes.

Advisers expected the impact to be widespread, anticipating that 66 per cent of their clients would be affected by the changes and will need IHT advice.

This represents a 16 percentage point increase compared to when advisers were asked the same question in Q1, when they expected 52 per cent of clients to be impacted.

Quilter argued that bringing pensions into the IHT and income tax system added further complexity for those planning later life and intergenerational wealth transfer.

This evolving landscape is leading to advisers reconsidering long-held assumptions that pensions should be the last asset touched in retirement.

Advisers expected clients to need more structured estate planning, including exploring different wrappers and trust options to protect family wealth, with 93 per cent saying that planning for the pensions/IHT changes was now a top priority, while 90 per cent wanted more support around trusts and wider estate strategies.

“Bringing pensions into the ambit of IHT has changed the rules of the game for retirement and estate planning,” said Quilter head of technical sales, Roddy Munro.

“For years advisers have helped clients build pensions that could provide support both in later life and for loved ones when they are gone. The shift to bring pensions within IHT means those long-held assumptions need to be revisited and strategies adapted in good time.

“People want to feel confident that their hard-earned wealth will benefit their families rather than be lost to avoidable tax. Advisers are stepping up to provide that reassurance and are looking for the right guidance and tools to help determine where wealth should sit and in what wrappers going forward.

“By acting early, advisers can demonstrate real value and help clients protect their future choices. We are committed to supporting them through this change with clarity, strong technical expertise and practical solutions.”

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