"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"
- Jenny Davidson - Scottish Widows
New Scottish Widows research has found that 57% of advisers say their clients are uncertain about pensions becoming subject to inheritance tax from April 2027, with the changes now less than a year away.
The figures come from Scottish Widows' Investor Confidence Barometer, which tracks the steps advisers are already taking in response. More than half (55%) are recommending lifetime gifting strategies, while 49% are encouraging clients to draw down pension assets earlier than planned. A similar proportion (51%) are reviewing retirement income and spending assumptions.
Advisers are also pointing clients toward alternative tax-efficient vehicles. Around 37% are recommending trusts or onshore bonds, and 32% are suggesting ISAs as a substitute wrapper. Nearly a fifth (18%) have recommended family investment companies. Beyond the individual strategies, 48% of advisers see the reform as a prompt to start broader conversations about intergenerational wealth planning with families.
Jenny Davidson, intermediary wealth director at Scottish Widows, said: "Pensions have long been a cornerstone of estate planning, offering a highly tax-efficient way to accumulate and pass on wealth. 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."
Davidson added that the transition also presents a commercial opportunity. "Any sizable landscape shift like this offers advisers an opportunity to demonstrate their value and engage with wealthier clients," she said. "Those advisers who act early and help guide clients through this process will reap the long-term benefits of closer relationships and greater trust."
