Seventy-one percent of people have admitted to not knowing how inheritance tax (IHT) works or what their beneficiaries may have to pay, Schroders Personal Wealth (SPW) has found.

This is despite 77% of adults being familiar with the concept of IHT.

The firm’s latest The Family and Finances Report, which surveyed 1,000 UK adults, revealed that two in five (40%) people believe that inheritance and estate planning is the "last great family taboo".

SPW found that while many UK adults acknowledge the importance of financial planning, many said that they often struggle to implement it.

Although 41% of respondents recognise not discussing finance as a widespread issue, 34% said they rarely or never have financial conversations with their families.

Two in five (40%) said that they don’t have a will in place, with the most common reason for not doing so being lack of time or believing it’s too early.

While almost half of respondents also identified lack of planning for later-life care as a common financial misstep, 40% admit to not addressing it themselves.

Chief client officer at SPW, Ben Waterhouse, said: "At SPW, we understand that discussing finances can often feel uncomfortable, yet it is essential for securing the financial future of our loved ones. This report highlights the importance of intergenerational planning and the need for open conversations about inheritance and estate planning.

"By addressing these topics early, families can avoid potential conflicts and make informed decisions that aim to benefit everyone involved. We encourage everyone to start these crucial conversations today to ensure peace of mind and financial confidence future generations."

Financial planning director at SPW, Alex Gaita, added that while many people put off getting their financial affairs in order, it is becoming "increasingly important" as people prepare for their futures.

He concluded: "While a will and Lasting Power of Attorney is a good start, they don't address the wider considerations needed when it comes to reducing IHT. That's where early planning could make a real difference. It can be quite a difficult topic but when I speak to clients about how their money could help the next generation - from their children, even to their great grandchildren's future - the conversation shifts. They start to think not just about what they've built, but about the legacy they want to leave behind."

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