More than half of advisers (57%) have said their clients are uncertain about pensions being subject to inheritance tax (IHT) from April 2027, according to a new study by Scottish Widows.

With just under a year until the changes come into effect, Scottish Widows’ latest Investor Confidence Barometer revealed the steps that advisers are taking to prepare.

The research, based on a study of 200 financial advisers, revealed that 55% are recommending lifetime gifting strategies to clients, while 49% are encouraging an earlier drawdown of pension assets. A similar number (51%) are reviewing clients' retirement income and spending assumptions.

Around a third (32%) of advisers have suggested the use of alternative tax-efficient wrappers such as ISAs, and 37% are advising clients to use trusts or onshore bonds. Scottish Widows also noted that 18% have also recommended the use of family investment companies.

Around half (48%) of advisers see the change as an opportunity to initiate earlier family conversations around intergenerational wealth planning.

“Pensions have long been a cornerstone of estate planning, offering a highly tax-efficient way to accumulate and pass on wealth,” intermediary wealth director at Scottish Widows, Jenny Davidson, said.

“Next year’s shake up represents perhaps the biggest change we’ve seen to pensions since pension freedoms, but one that advisers are already getting well ahead of, according to our research.

“Any sizable landscape shift like this offers advisers an opportunity to demonstrate their value and engage with wealthier clients. Those advisers who act early and help guide clients through this process will reap the long-term benefits of closer relationships and greater trust.”

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