Inheritance tax (IHT) and estate planning clients are getting younger as demand for support surges, but advisers worry clients are still engaging with the issue too late, new research from investment manager Downing shows.
Its nationwide study found 84% of advisers and wealth managers say the average age at which clients first contact them about IHT and estate planning has fallen over the past year.
That includes more than a quarter (27%) who say the average age has dropped considerably, as interest in IHT and estate planning has increased.
However, despite clients beginning IHT and estate planning conversations at a younger age than they were a year ago, more than two out of three (67%) advisers believe clients still engage with the issue too late in general.
Advisers themselves state that, on average, they begin engaging clients on estate planning when the client is 46 years of age. However, 39% of advisers say they begin engagement when the client is past 50.
Advisers and wealth managers estimate more than a quarter (27%) of their client base has a potential IHT liability currently, and 42% say they proactively contact clients about IHT and estate planning.
A further 32% say they rely on a combination of proactively contacting clients and waiting for clients to raise the issue, while 26% leave approaches on IHT to clients.
Downing’s research asked advisers what the biggest gaps in clients’ IHT and estate planning are - nearly half (47%) of advisers say clients are unaware of the need for IHT and estate planning.
Around two out of five (39%) said clients are unaware of the upcoming inclusion of DC pensions in estates, while 35% said clients have limited awareness of how trusts can be used as part of wider estate planning strategies to pass on wealth efficiently and potentially mitigate inheritance tax liabilities. A further 31% said clients do not have wills.
Rebecca Ward-Howes, head of product at Downing, said: “The biggest risk in estate planning is often delay. That risk is only growing: Business Relief reforms are already changing the picture, and from April 2027, unused pensions will be pulled into the IHT net for the first time, catching out many families who assumed their pension was safe from IHT. It’s encouraging that clients are engaging with advisers earlier than before but our research shows many are still waiting until their options have narrowed. As more families find themselves exposed to potential IHT liabilities, early engagement and clear planning have never been more important.
At Downing, we’re focused on giving advisers the tools to model these complex scenarios with confidence, and communicate outcomes to clients in a compelling, accessible way.”
