Richard Higgs, Chartered Independent Financial Planner
As we await further details on the recent Autumn Budget, here’s an overview of what we know so far about how it could impact later-life financial planning. These changes could completely reshape estate planning strategies, especially for those with substantial pension savings and inheritance tax concerns.
From 6th April 2027, unused pension savings will no longer be exempt from IHT, potentially increasing the tax burden on estates with substantial pensions. This marks a shift from current rules, where pension plans are not usually considered part of the estate for IHT purposes. Those with significant unused pensions may need to reconsider their strategies for passing wealth to future generations.
Additionally, Alternative Investment Market (AIM) ISAs, previously entirely exempt from IHT if held for at least two years, will now face a reduced IHT rate of 20%. This affects estates that had relied on AIM ISAs for tax-efficient inheritance planning.
For IHT-free investment plans in Business Property Relief (BPR) qualifying assets, which still offer 100% IHT relief if held for two years, a new cap of £1 million will be introduced. Any amount above this threshold will incur a 20% IHT rate.
Furthermore, the freeze on the standard nil rate band (£325,000) and residence nil rate band (£175,000) will continue until at least 2030. As property and asset prices increase, more estates will likely fall within the IHT threshold, heightening the tax burden on future generations.
To address these changes, Harold Stephens is hosting a seminar on Wednesday, 29th January, from 1:30–2:30 pm at Stoke Lodge, Shirehampton Road, Stoke Bishop BS9 1BN, focused on navigating the new IHT rules and other budget implications. Planning early can make a significant difference, and this seminar offers valuable insights. To book a place, call 0117 3636 212 or email marketing@haroldstephens.co.uk.
We record regular video updates on a range of later life financial topics – search ‘Harold Stephens IFA’ on YouTube.
