Almost three-quarters (74%) of UK adults have not taken any steps to reduce their inheritance tax (IHT) liability, a new study has found.

Research by AKG and Canada Life revealed that just one in five (20%) people have taken any action to mitigate a potential IHT bill.

Of these people, the findings indicated that 7% have taken professional financial advice, 7% have made gifts to family members, 4% have set up trusts, 3% have invested in alternative asset classes and 5% have a suitable life assurance policy in place.

However, the study also suggested that nearly a quarter (23%) of people have given no thought to IHT planning, leaving some at risk of being caught by a tax net with thresholds that are set to remain frozen until April 2026.

Canada Life MD and executive director wealth, Sean Christian, said there is a “huge opportunity” for further education and guidance when it comes to IHT planning.

“Families have been through intense strain over the last 18 months, with many being faced with difficult discussions and decisions that may have previously been brushed under the carpet,” Christian commented.

“Demand for advice will grow, largely driven by societal shift and demographic change but also financial priorities following the pandemic. But as an industry we need to be clear how we can best serve these clients today and also the clients of the future in an efficient and scalable way. Building relationships with the wider family earlier by having the conversations which span generations will clearly demonstrate both the role and value of advice.

“The industry should be seen as being on the front foot for intergenerational planning and feeling better equipped to start the conversation.”

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