Recently Aegon asked customers aged over 40 from the Aegon Customer Panel what they knew about IHT and what measures they had in place to mitigate the IHT liability of their estate.
Of those who responded, the majority (87.5%) were aware that the government could take 40% of inheritance on death. However, only 29% of those surveyed had taken measures to mitigate their IHT liability. Of this 29% who had taken appropriate measures, most (40%) had sought assistance through a financial adviser with a further 31% seeking assistance from a solicitor.
Of the 71% who hadn’t taken measures to mitigate their IHT liability, the reasons given included lack of an adviser, the cost of seeking advice, and the lack of awareness and complicated nature of IHT
Overall 90% were interested to hear about a way to potentially protect the value of the estate so they could pass on more to family or loved ones.
To complement these findings, Aegon has built an IHT planning solution, in the form of a whole of life protection policy that can be placed in a discretionary trust, to enable customers to protect and pass their wealth on to the next generation. Central to this new policy was the need to address the low take-up rate of trusts and the lack of awareness around IHT planning.
Other key features of the Aegon Whole of Life policy include a range of guaranteed insurability options so cover can change with customer circumstances, and a joint life separation option, meaning that if a policyholder was to divorce or dissolve a civil partnership, they could split the joint-policy into two single-life policies.
Dougy Grant, Protection Director at Aegon UK, said:
“Inheritance tax can cost those left behind thousands of pounds worth of additional heartache, yet there are ways to make provisions for this – such as writing life policies in trust – which we estimate is being done in only 10% of cases. Our Whole of Life policy is one way to address this. It helps to reduce the amount of tax that would have to be paid from the estate, so more can be passed on to the beneficiaries.”
“There is £530 million paid unnecessarily[3]each year in IHT and we want to help our customers to change that statistic. In addition to this our own research found that most customers are looking for simple solutions to help them manage their IHT liability. With this in mind we’ve undergone a robust product development process to understand the needs of our customers and have designed the product to meet those needs.”
“Our track record of underwriting expertise when it comes to higher sums assured or older lives makes a whole of life product a perfect fit for us to complement the rest of our protection product portfolio as well as Aegon’s broader range of advised at retirement and wealth solutions. This development re-affirms the role protection has to play in helping us get the UK get ready for retirement and beyond.”
