Thinking about money requires effort and good planning. Often, it is a task forgotten or even omitted. The Swiss bank UBS said in its latest Global Wealth Report that Britain has seen the sharpest fall in average wealth per adult in the developed world since 2020. Between 2020 and 2025, Britons' individual wealth, measured by the value of assets like property and stocks and shares, fell by around £28,500.
It is perhaps no surprise that many Brits regret certain steps they take - or don't take - with regards to managing their finances. The consequences show later in life, often when people retire. Financial advisers responsible for managing hundreds of millions of pounds have talked about the most common mistakes they see. One of them is leaving inheritance tax planning for too late in life, with many in their 60s wishing they had started doing it sooner as a method of estate planning.
Inheritance Tax and the Seven-Year Rule
There are ways to reduce the amount of inheritance tax your family may have to pay. For example, you can give away up to £3,000 each tax year using your annual tax-free gift allowance, and this gift is immediately exempt from inheritance tax. For larger gifts, the seven-year rule usually applies. This means that if you give money, property or other assets away and live for another seven years, the gift is normally not included when inheritance tax is calculated.
However, many people delay giving money or property to their loved ones because of the seven-year rule. Worrying that they won't live that long, they keep their money or assets instead. If they die without making the gift, or within seven years of making it, those assets are usually included in their estate when inheritance tax is calculated, meaning their family may have to pay more inheritance tax.
Advisers Highlight Common Regret
Jo Summers, of law firm Jurit, told The Telegraph: "One of the most common regrets I see among people in their 60s is leaving important financial planning too late. Many spend years worrying about making gifts to children or grandchildren, only to realise later that a significant portion of their estate could be lost to inheritance tax that might have been mitigated with earlier planning."
Summers added: "Then they realise, often 10 years later, that they did survive seven years from when they first thought about doing the gift but because they didn't make the gift, the assets are still within their estate and will be subject to inheritance tax when they die. Not only that, since they are now 10 years older, they are even less likely to survive the seven years. The general rule is that the earlier you can make gifts, the better – subject to not giving away too much, of course."
