Over-55s ‘unprepared’ for IHT hit

Over-55s in the UK are not prepared for the potential inheritance tax (IHT) liabilities they could be required to pay, according to Mattioli Woods.

The wealth manager’s research, conducted by YouGov, showed that while IHT featured prominently among financial concerns, 23 per cent had never assessed whether their estate could be subject to IHT.

Just 41 per cent believed their current arrangements would minimise IHT, while 23 per cent said they were not confident their plans would reduce any future liability.

Fewer than a quarter (22 per cent) of respondents expected their estate to be subject to IHT.

Those in the south east of England reported the lowest confidence in their estate planning to minimise IHT (27 per cent), followed by Yorkshire (25 per cent) and the south west of England (24 per cent).

Those in the north west of England felt best prepared, followed by the East Midlands and the east of England.

Paying for care or later life costs was found to be the primary concern among over-55s, above IHT, running out of money in retirement, ensuring fairness between beneficiaries, and potential family disputes.

“People naturally worry about whether they'll have enough money to fund later-life care, particularly as people are living longer and care costs continue to rise,” said Mattioli Woods wealth management director, Yasin Patel.

“For many families, maintaining financial independence in retirement understandably takes priority over what happens to their estate afterwards. But focusing solely on funding later life can mean IHT planning slips down the priority list.

“Good estate planning isn't simply about reducing tax. It's about making informed decisions, ensuring assets pass to the right people in the right way and giving families greater certainty during what is often an emotional and stressful time.

“Starting these conversations earlier gives families more options – whether that's reviewing wills, making lifetime gifts where appropriate, or understanding how pensions fit into an estate.

“Proactive planning can help ensure more wealth reaches future generations rather than being lost unnecessarily through poor preparation.”

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