Inheritance remains one of Britain's most avoided family topics, but the silence can turn love into panic when paperwork suddenly matters. New research from wealth manager Mattioli Woods reveals that one in four over-55s admit they have never discussed inheritance with their family.
New Tax Rules Make Conversations Urgent
The need to talk is becoming more urgent as Chancellor Rachel Reeves plans to make unused defined contribution pension pots and pension death benefits liable to inheritance tax (IHT) from April 6, 2027. This change could significantly increase the tax burden on many estates.
Andy Burnham has previously called for a new tax raid on inheritances and is also being pressed to scrap the capital gains tax "uplift", which currently wipes out any CGT liability on death. If Burnham gains power, families could pay both IHT and CGT on the same money, making it even more critical to plan ahead.
Reluctance to Talk Creates Problems
Inheritance remains an uncomfortable subject for many families. Some see money as private, while others feel it is too early to discuss the sensitive topic. However, delaying the conversation can leave families scrambling when important decisions need to be made.
Amit Joshi, managing director of wealth at Mattioli Woods, said: "The reluctance to talk about inheritance is understandable, but it can leave families unprepared at a time when clarity matters most." He added that key decisions are often left until moments of stress or urgency, when it is harder to reflect clearly or act in a coordinated way. "That can create uncertainty around intentions, increase the risk of disputes, and lead to avoidable delays in administering estates."
Knowledge Gaps Among Over-55s
Many will lose out because they don't understand the rules. Only around a third of over-55s know pensions may soon attract IHT, while just one in six understand key allowances such as the £325,000 nil-rate band and £175,000 residence nil-rate band. However, six in 10 do know about the longstanding seven-year gifting rule, where gifts fall outside of IHT if you live long enough after making them.
Better-Off Households Already Acting
New research from RBC Brewin Dolphin shows that better-off households are already taking action ahead of next year's pensions IHT raid changes. Many are gifting larger sums earlier, and to a wider group of beneficiaries.
RBC Brewin Dolphin director Michelle Holgate said the changes mean more will get caught in the IHT net for the first time, and maybe without realising it. "Gifting while you are alive can help but it's important to understand the rules and have the right advice."
