Lack of financial planning leaves more women at risk of paying too much IHT

More than half (53%) of women are planning on leaving an inheritance but a lack of financial planning means many are at risk of paying too much inheritance tax (IHT), new research has found.

Findings from Fidelity International, which surveyed 2,000 people, revealed that out of those planning on leaving an inheritance, more than half (55%) of women have made no financial planning – compared to 41% of men.

Women were also found to be more likely (37%) to say they don’t understand the rules around IHT compared to men (25%).

This is despite women holding more wealth than men when it comes to estates that are liable for IHT, which Fidelity suggested was likely due to their higher life expectancy. Figures from the Office for National Statistics show that female-owned estates that are liable for tax have an overall net capital value of £13.6bn, compared to male-owned estates which have an overall net capital value of £12.3bn.

This mean that female-owned estates are liable for £430m more in IHT than male-owned estates, at £2.53bn compared to £2.10bn.

Fidelity International head of advice policy and development, Dawn Mealing, commented: “Out of those who are liable to pay IHT, women’s net estates are worth £1.3bn more than men’s. Yet, almost half have done no financial planning to make sure this wealth is gifted the way they want – something isn’t adding up.

“Women tend to have larger inheritances as they live longer, and therefore are more likely to inherit wealth from their partner. This leaves them facing even bigger decisions as it means they are responsible for both theirs and their partner’s wishes, and without help from an adviser they could find themselves lost.”

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