master-admin, Author at Investing For Tomorrow

It is estimated that £26 billion in unclaimed pensions awaits reunion with their rightful owners in the UK, according to figures[1]. The good news? With some effort and the right tools, tracking them down is entirely feasible. Here’s a step-by-step guide to help you reclaim your lost pensions and secure your future.

Why do pensions go missing?

It’s surprisingly common to lose track of a pension, especially if you’ve changed jobs multiple times throughout your career. Many employers offer workplace pensions, but once you leave a position and move on, those funds can quickly fade into the background. This situation occurs even more frequently if you do not update your contact information with your pension provider after relocating.

Adding to the confusion, changes in the corporate world can complicate matters. If the company you worked for was acquired, renamed or went into liquidation, your pension might now be managed by a different organisation. Similarly, merging providers or those being bought out can leave you uncertain about where your savings are currently held.

How to find old pensions

Gather your documentation

Before you begin, take some time to search through your paperwork for old payslips, pension statements or letters from providers. These documents can help you track down vital details, such as policy numbers or employer names. Even small details, like a provider’s logo or scheme name, could be crucial in connecting you with your pension.

It’s worthwhile to review old emails or online accounts, as some companies may have sent digital statements or communications that could hold the information you require.

Use the Pension Tracing Service

If you reach a dead end with your documents, the government’s Pension Tracing Service is an excellent next step. This free online service can assist you in finding the contact details of workplace or personal pension schemes, even if you only have basic information to start with.

To use the service effectively, try to have the name of your former employer on hand. Even if your employer no longer exists, the Pension Tracing Service can often direct you to the organisation now managing that old pension scheme. Just remember that the tool provides contact details only, so you’ll still need to reach out to the provider yourself.

Make contact with pension providers

After identifying where your pension may be held, contact the relevant provider. To expedite the process, have your National Insurance number, previous employer names and any former addresses ready. The more details you provide, the easier it will be for the provider to locate your account.

Remember that pension providers will likely ask you to verify your identity. This might require providing copies of identification documents or proof of name changes, such as a marriage certificate. While these precautions may seem time-consuming, they are essential to ensure that pensions reach their rightful owners.

Tackling complex cases

What if your search yields no results? Some cases of lost pensions can be more complex, particularly when funds were transferred between schemes or consolidated after corporate restructures. If the trail has gone cold, it is essential to obtain professional financial advice.

We have the resources to perform more comprehensive searches that could reconnect you with potentially thousands of pounds in lost savings. We can also provide guidance on whether consolidating your pensions or keeping them unchanged is the best option for your situation.

Consolidating your pensions

For those juggling multiple pensions, consolidating them into a single pot can bring clarity and simplicity. Managing one pension can be easier, reduce administrative fees and provide a clearer view of retirement funds.

However, consolidation isn’t suitable for everyone. Before transferring, we’ll check if any of your pensions offer valuable benefits such as guaranteed annuity rates or preferential terms that could be forfeited. Some schemes may also impose exit fees for transfers, so it’s crucial to evaluate the numbers before making a decision.

Stay organised to avoid losing pensions again

Once you’ve located your pension pots, prioritise organisation. Create a detailed record of your pensions, including provider contact details, and store this information in a safe yet accessible place. Remember to update each provider whenever your circumstances change, like moving house or getting married.

For additional peace of mind, consider signing up for available online accounts. Many pension providers now offer digital dashboards, making it easier than ever to check your balances and update your details as needed.

Source data:
[1] ‘Lost Pensions 2022: What’s the scale and impact?’, PPI Briefing Note Number 134, Pensions Policy Institute, October 2022.

THIS ARTICLE DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE. THE VALUE OF YOUR INVESTMENTS CAN GO DOWN AS WELL AS UP, AND YOU MAY GET BACK LESS THAN YOU INVESTED.

While many solutions are available to help reduce or mitigate the impact of IHT, finding the right approach for your situation is crucial for securing your family’s financial future. One highly effective, though sometimes overlooked, solution is whole of life cover. This type of life insurance can provide your family with the financial means to address an IHT liability when the time comes.

What is whole of life cover?

Whole of life cover is a type of life insurance policy that guarantees to pay out a tax-free lump sum whenever you pass away, as long as you keep up with the premium payments. Unlike term insurance, which covers you for a fixed period, whole of life cover doesn’t expire. It’s designed to provide financial protection for your loved ones and can be tailored to meet specific needs, such as covering IHT liabilities.

This kind of policy is frequently used in estate planning, especially for individuals whose assets may exceed the IHT threshold. It essentially acts as a financial safety net, providing funds that can be used to settle any tax dues owed when your estate is transferred to your heirs.

Does IHT still have to be paid with whole of life cover?

Yes, IHT still needs to be paid even if you have a whole of life cover policy in place. The policy does not eliminate your tax liabilities but provides a way to meet them without placing undue financial strain on your family. When properly structured and written in an appropriate trust, the payout from a whole of life insurance policy is kept outside of your taxable estate.

This ensures that the funds remain untouched by IHT and can go directly towards paying the tax bill. Without such preparation, heirs might face the daunting task of liquidating assets or accessing savings to cover IHT dues, further complicating an already emotional time.

What does whole of life cover cost?

The cost of a whole of life policy depends on several factors, including your age, health, lifestyle and the level of cover you wish to secure. Generally, premiums are higher than term life insurance because of the guaranteed payout and lifelong cover. However, considering the potential IHT savings it provides, many people find it to be a worthwhile investment.

For instance, a healthy 55-year-old non-smoker might pay anywhere from a few hundred to over a thousand pounds per month, depending on the amount insured. Furthermore, some providers offer flexible options, such as reviewable premiums that can fluctuate over time. While this flexibility may appeal to some, others may prefer fixed premiums for increased predictability.

Using life insurance to cover IHT

Whole of life cover is particularly effective for estates that exceed the IHT threshold, which is currently set at £325,000 per individual or £650,000 for married couples, who can transfer any unused allowances (tax year 2025/26) and the residence nil rate band remains in place is currently set at £175,000. The IHT tax-free threshold will remain in place until 2030. Assets above this threshold are currently taxed at 40%. Without proper planning, a significant portion of your estate may be allocated to HMRC instead of your loved ones.

Life insurance, specifically whole of life cover placed in an appropriate trust, guarantees that a designated sum is available to cover this tax bill, preserving most of your estate for your heirs. This strategy is frequently used alongside other estate planning tools such as gifting, trusts or investing in assets that qualify for business relief to maximise IHT mitigation.

This disparity isn’t just a statistic; it’s a critical issue that can have lasting effects on future financial security. The gap highlights the need to understand and address the factors preventing young women from investing. Whether it’s a lack of confidence, limited access to resources or traditional attitudes about financial decisions, these barriers are preventing a significant portion of young women from taking the necessary steps to secure their financial futures.

Understanding the financial confidence gap

The disparity is not only about how much young women invest but also about their overall savings. Excluding pensions and property, the average savings and investments for 18-24-year-old men is around £3,000, while young women average only £1,900.

One key factor driving this gap is confidence. Over half (53%) of women aged 18-24 admit they lack confidence in managing their retirement savings. Meanwhile, only 31% of men express the same concerns. Without the confidence to start investing early, young women risk having significantly less by the time they retire.

A problem that worsens with age

This lack of confidence affects not only young women today; it also lays the groundwork for financial inequality later in life. For instance, the data highlights that women over 55 have an average of £20,000 in savings and investments (excluding pensions and property), while men of the same age average £50,000.

Unfortunately, many women in this age group remain disengaged from financial planning. Alarmingly, only 40% of women over 55 invest outside their pensions, and half have done little to no research on how much they’ll need for a comfortable retirement. Men, while still not perfect, fare slightly better, with 40% admitting to being similarly unprepared.

Why women need to start investing now

The earlier you begin investing, the greater your chances of building wealth due to the power of compound growth. Young women, in particular, could greatly benefit from exploring investment options. While investing may seem intimidating, starting small and building confidence over time can make a world of difference in financial security.

It’s also essential to challenge traditional attitudes toward money. Investments shouldn’t be considered a ‘risky move’ or a male-dominated activity. With the right research and resources, investing becomes a strategic and rewarding method to secure your financial future.

Source data:
[1] Scottish Widows’ Women and Retirement Report. Research conducted online by YouGov across a total 3,626 nationally representative adults aged 18+ in the UK between 23–30 August 2024.

However, it’s important to consider how withdrawing this money could affect your overall retirement income. The remaining funds in your pension pot will need to provide an income for the rest of your life, so taking out a large sum early on might have a lasting impact on your financial security. By understanding these factors, you can make a more informed decision about how best to utilise your pension savings.

How does tax-free cash from a pension work?

When you turn 55 (57 starting in April 2028 unless you have protections in place), you typically have several options for accessing your defined-contribution pension. One of the most appealing choices is to take a tax-free lump sum of up to 25% of your pension savings (subject to any protections in place and the LSA (Lump Sum Allowance). This can be received as a single payment or distributed over multiple withdrawals, depending on your provider’s policies.

The remaining 75% of your pension can then be accessed in various ways, such as regular withdrawals, purchasing an annuity or leaving it invested for future growth. However, this portion is typically subject to Income Tax based on your total annual earnings.

What are the rules for taking your 25% tax-free lump sum?

The key rule is that you can only withdraw up to 25% of the total value of your pension pot tax-free. This applies to each pension pot you hold, not just one. Keep in mind that if you have multiple defined contribution pensions, you’ll need to check the specific rules and terms with each provider.

The financial impact of taking a tax-free lump sum

While a 25% tax-free cash option might seem appealing, it’s crucial to consider the long-term effects on your retirement income. Taking a lump sum decreases the total value of your pension pot, meaning you’ll have less money available to generate income in the future. This is especially important if you rely on your pension for everyday living expenses.

Moreover, by choosing to deposit it in a savings account or another low-growth investment, you might miss out on the potential returns your money could generate if it remained in your pension. Additionally, inflation could erode the actual value of your cash over time, diminishing its purchasing power.

Could taking a lump sum be the right option?

Despite these risks, there are situations in which taking a tax-free lump sum may be a wise decision. For example, you could use it to pay off outstanding debts, invest in a new business venture or help a family member with property expenses. It could also fund a dream holiday or facilitate home improvements, allowing you to enjoy your retirement on your own terms.

However, timing is crucial. Taking a lump sum earlier in life can significantly influence your future retirement income, whereas waiting until closer to retirement age preserves more of your funds for a longer period. Careful planning and a clear financial strategy are vital for making the best decision.

By taking the time to start these conversations, you can tackle potential challenges early and create a plan that benefits everyone involved. Whether it’s ensuring sufficient funds are saved for future care, discussing how assets will be managed or simply understanding the wishes of older relatives, these discussions help eliminate uncertainty.

Why talking about finances is essential

Delaying financial discussions can lead to anxiety and leave families unprepared. Research shows that the life expectancy of a 50-year-old in the UK is now 86, which means many of us will need to finance over three decades in later life[1].

At the same time, societal shifts are altering our financial responsibilities. More families in England and Wales now have adult children living with their parents over 50, with a 13.6% increase recorded between 2011 and 2021[2].

Meanwhile, over 1.3 million people in the UK are juggling caregiving responsibilities for both their children and ageing parents. Rising financial pressures mean that more people are working later in life, with the number of UK workers aged 65 and over increasing by 36% between 2014 and 2022[3].

Start the conversation early

Initiating the conversation as early as possible benefits everyone. Addressing topics like care plans, inheritance and financial wellbeing promotes smoother planning and greater peace of mind for the entire family. If you’re unsure how to approach these subjects, don’t worry – here are some key questions to ask and actions to consider.

Have you reviewed your living costs recently?

Help older relatives successfully manage their day-to-day expenses by working together on a budget. Include necessities, treats, savings and one-off expenditures. It’s also worth reviewing utilities, insurance policies and subscriptions to ensure they’re competitively priced and truly needed.
Younger family members can assist with online research, helping their elders access the better deals if they are less confident navigating digital platforms. Finally, check whether all available tax allowances are being claimed, such as the marriage allowance. These steps can make budgets more efficient and savings more impactful.

What about preparing for Inheritance Tax (IHT)?

Rising property values, frozen IHT thresholds and pension changes due in April 2027 mean more families may see larger IHT bills in the future. However, strategies like gifting assets and setting up trusts, such as gift or loan trusts, can ease these burdens.

Seeking professional financial advice will help your family choose the best route for reducing IHT responsibilities and protecting the value of your estate.

Legal preparations make a difference

Do you have an updated Will?

Having a Will ensures your wishes are followed and helps prevent disputes among loved ones. Regularly updating it is crucial, particularly after big life events such as births, marriages or deaths. For example, marriage automatically invalidates a previous Will, which means a new one is needed.
Taking time as a family to discuss the contents of a Will together can provide reassurance and avoid unpleasant surprises later on. Effective communication brings clarity and peace of mind.

Have you set up a Lasting Power of Attorney (LPA)?

An LPA grants a trusted person authority to make decisions regarding your finances or healthcare if you’re unable to. By setting this up alongside a Will, you can save time, money and stress down the line.

With the rising costs of long-term care threatening to erode wealth, planning for these expenses is equally important. Options like immediate needs annuities can provide tax-free income directly to care providers, easing financial strain and ensuring your loved ones receive the care they deserve.

Keep your records in order

Are all important documents organised?

Good record-keeping can prevent unnecessary confusion during critical times. Ensure financial documents and paperwork, Wills, trust documents and pension letters of wishes are not only stored securely but that family members know where to find them.
Maintaining a thorough record of gifts and expenditures can also help prove any IHT exemptions in future. Having orderly financial documents provides clarity when it’s needed most.

Take control of your family’s financial future

When families come together to collaborate on financial planning, it does more than simply manage money – it strengthens relationships and alleviates unnecessary stress. Investing time now to discuss and plan for the future not only ensures financial security but also establishes a legacy of peace and stability.

Engaging in conversations about savings, investments, retirement and future goals prepares everyone for what lies ahead, reducing potential tensions or conflicts down the line. More importantly, these plans offer a gift that transcends money – the reassurance that your loved ones are well taken care of. When financial concerns are addressed with foresight and collaboration, it paves the way for a more harmonious and fulfilling life for all involved.

Source data:
[1] Projected life expectancy for a 50-year-old UK male is 84 years. Projected life expectancy for a 50-year-old UK female is 87 years. Average projected life expectancy for 50-year-old UK male and females is 86 years. Life expectancy calculator. Data source: Office for National Statistics, calculated on 29 October 2024.
[2] More adults living with their parents. Data source: Office for National Statistics, published 10 May 2023.
[3] More than one in four sandwich carers report symptoms of mental ill-health. Data source: Office for National Statistics, published 14 January 2019.

Proper asset allocation can help you achieve steady growth while protecting your portfolio from significant downturns. By ensuring your investments align with your goals, time horizon and risk tolerance, asset allocation plays a vital role in creating long-term financial stability and growth. But what does it really mean, and how can you ensure that your portfolio is appropriately balanced?

What is asset allocation?

Asset allocation refers to the process of diversifying your investments across various asset classes, such as equities (stocks), bonds, property and cash. Think of it as assembling a comprehensive toolkit, with each tool serving a distinct purpose. The goal is to achieve an optimal balance between risk and return, tailored to your financial objectives, risk tolerance and investment horizon. Each asset type responds differently to changing economic conditions.

For example, shares generally provide higher potential returns, which can be appealing for long-term growth. However, they come with significant volatility, meaning their value can fluctuate dramatically. Bonds, on the other hand, offer greater predictability and stability, although their returns are typically lower. Property can yield steady rental income and capital appreciation, but it also presents challenges, such as illiquidity (the difficulty of selling quickly).

Lastly, cash is the safest option for capital preservation, but it usually yields low returns, especially during times of high inflation. By diversifying your investments across these types, you minimise the risk of a single poorly performing area dragging down the overall value of your portfolio.

Why does asset allocation matter?

The importance of asset allocation cannot be overstated; it serves as the foundation of your financial plan. When markets fluctuate, as they inevitably do, a well-balanced portfolio ensures that your investments are not overly concentrated. Instead, you distribute risk evenly, which increases the likelihood of stable, long-term returns.

Consider this real-world example, if your portfolio in 2008 was heavily weighted toward equities during the global financial crisis, you might have experienced substantial losses as markets declined. However, if your allocation included government bonds or cash, those assets likely weathered the downturn better, mitigating some of the overall damage to your portfolio.

While past performance does not guarantee future growth, asset allocation has historically been a crucial factor in long-term investment performance, greatly exceeding the effects of decisions about which specific stocks or funds to purchase. The overall mix is what matters, not just the individual selections.

How to determine the right mix for your portfolio

Finding the right asset allocation begins with understanding your financial objectives. Are you investing to grow your retirement fund, save for your child’s university expenses or achieve financial independence by a certain age? Clearly defining these goals will help to shape your investment strategy.

Risk tolerance plays a crucial role as well. Consider this scenario: if your investments were to lose 20% in a single year, would you panic and sell, or would you hold steady, understanding that markets generally recover over time? Your response offers a clear indication of how much risk you’re comfortable accepting.

If the prospect of significant losses troubles you at night, a portfolio focused on bonds and cash may be a wiser choice. Conversely, if you’re comfortable enduring some volatility for potentially greater rewards, a larger allocation to equities could be appropriate.

Considering time horizons and rebalancing

Your time horizon – the period during which you intend to keep your money invested – greatly influences asset allocation. Longer time horizons allow for riskier, high-growth investments such as stocks. For instance, a 30-year-old saving for retirement might allocate 80% to equities and 20% to bonds. Conversely, shorter horizons, like saving for a house deposit in five years, necessitate conservative options such as bonds or cash that preserve capital.

Rebalancing your portfolio is as crucial as selecting the appropriate allocation from the start. Over time, your investments’ value will fluctuate, and some asset classes may appreciate faster than others. A previously well-balanced portfolio could become tilted towards equities if they perform exceptionally well.

Regularly reviewing and adjusting your asset allocation helps maintain the intended balance and keeps your strategy aligned with your goals and risk tolerance. For example, if equities originally made up 60% of your portfolio but increased to 70% due to strong performance, you may sell some equities and reinvest in bonds or cash to realign the mix.

Seeking professional advice

While many people feel confident managing their finances, asset allocation can be a complex area to navigate effectively. We offer invaluable support by assessing your situation as a whole, identifying overlooked opportunities, and guiding you through market uncertainties. We will also adjust your portfolio as your life circumstances or market conditions evolve.

Understanding and implementing asset allocation is a crucial step toward achieving your financial goals, but it doesn’t stop there. Maintaining a healthy portfolio requires regular monitoring, re-evaluating your goals and making necessary adjustments.

A review isn’t just about identifying potential problems; it’s an opportunity to fine-tune your financial plan for improved performance, whether you’re planning for the short or long term. It allows you to assess your financial health, ensure you’re on track and modify your plans as your needs and goals change. Here’s how a financial MOT can help you secure a smoother ride towards a brighter future.

Do you need to check if your retirement savings are on track?

How confident are you that you’re saving enough for retirement? It’s all too easy to set up a pension and then neglect it, allowing it to operate in the background. However, life changes, markets fluctuate and inflation continues to erode your savings, which means you could risk falling short of your retirement goals.

Take time to review your pension contributions and assess how well your pension fund is performing. Are you on track to achieve the retirement you envision? A financial MOT can offer clarity while helping you determine if you need to save more, adjust your investments or explore alternative options to ensure a financially secure future.

Is it time to consider rebalancing your portfolio?

Markets change, as we’ve observed in recent weeks with the announcement of President Trump’s tariffs, which may signal a need to rebalance investments. Over time, your portfolio may drift from the original asset mix. For instance, a previously balanced allocation of 50% bonds and 50% stocks may now lean too heavily toward stocks due to strong historical market performance.

That’s where portfolio rebalancing comes in. By realigning your investments to your preferred level of risk and financial goals, you maintain control and ensure that your strategy remains tailored to your needs. This step is especially important as you move through different life stages, and your circumstances at the time, each with its own level of risk tolerance.

Are you safeguarding what matters most?

While we cannot predict the future, we can prepare for it. Ensuring that you have sufficient protection in place is one of the most important steps to safeguard your financial wellbeing. Do you have life insurance, income protection or critical illness cover?

A financial MOT is the ideal opportunity to review your policies and verify that they’re suited to your needs. Make sure the level of coverage aligns with your current circumstances, financial obligations or assets, such as your home. By doing this, you can safeguard your loved ones from financial stress in case the unexpected occurs.

Could you invest more tax-efficiently?

No one wants to give away more of their hard-earned money in taxes than necessary. However, without regular reviews, you might miss opportunities to invest more tax-efficiently and maximise your savings.

For example, are you fully utilising your annual Individual Savings Accounts (ISA) allowance or contributing enough to your pension to benefit from tax relief? Tax allowance rules can change, so it’s essential to stay informed and adjust your investment strategy accordingly. A financial MOT can help uncover simple yet effective ways to make your money work harder for you.

Is it time to reevaluate your financial goals?

Do your current financial goals still align with your life situation? Perhaps you’ve achieved some targets, or other priorities have emerged. Whether it’s purchasing a holiday home, establishing an emergency savings fund, starting a business or planning a once-in-a-lifetime trip, a financial MOT provides an opportunity to pause and reflect.

By reassessing your goals, you can develop a financial plan that reflects your current life stage and ambitions. It also presents the perfect opportunity to consider long-term objectives, such as funding your children’s education, while remaining focused on your retirement plans.

Take control of your financial future today

Your financial MOT isn’t merely a box-ticking exercise; it’s your opportunity to gain clarity, regain confidence and take control of your future. With expert advice and tailored insights, you can proceed knowing your finances are being managed effectively.

The survey of UK adults aged 50 and older found that only 37% of individuals with defined contribution (DC) or personal pensions considered how a lump sum withdrawal might impact their tax rate or could potentially push them into a higher tax bracket. Additionally, only 39% of respondents consulted a financial adviser before withdrawing money from their pension.

Making rash decisions at 55

Worryingly, the research highlights a trend of individuals hastily accessing their pension funds as soon as they reach the minimum qualifying age of 55. Nearly 1 in 12 (8%) withdrew their tax-free lump sum within six months of their 55th birthday.

Since the introduction of pension freedoms in April 2015, retirees have been able to choose from a variety of options. These options include taking lump sums directly, withdrawing the entire pension pot, drawing a continuous income through income drawdown or purchasing an annuity for guaranteed lifetime income. Many even combine these choices to suit their circumstances. However, with so many possibilities, deciding on the best approach can be a daunting and complex task.

Allure of tax-free lump sums

The allure of tax-free cash remains compelling, as over half (55%) of eligible individuals choose to take the maximum 25% permitted. However, questions emerge regarding how this money is being utilised. The research found that 32% of those withdrawing tax-free sums used the funds to clear debts, including 15% who paid off a mortgage and 18% who tackled other borrowing, such as credit card balances or car finance.

Others took a more cautious approach, with 26% depositing their lump sum into a savings account or bank account. On the other hand, some chose to spend their money on home improvements (19%) or to support family members (8%).

Complexities of retirement planning

One of the most striking revelations is how few people seek financial guidance when making these significant decisions. Alarmingly, 18% of those eligible to withdraw from their pension did so without consulting anyone – not even family or friends. Meanwhile, only 20% of those aged 50 or over with a DC or personal pension utilised the government-backed Pension Wise service for advice.

The research also uncovered widespread concerns about the long-term impact of these decisions. Over two in five (42%) people aged 50 or above admitted they fear running out of money during retirement.

Source data:
[1] Survey data collected between 17–19 December 2024 by YouGov plc on behalf of Royal London. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,012 adults aged 50+, of which 311 have done something related to their workplace defined contribution pension or Personal pension/ SIPP. Fieldwork was undertaken between 17–19 December 2024. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

Lifetime gifting is a straightforward solution

For families affected by the new rules, lifetime gifting offers one of the simplest and most tax-efficient ways to minimise IHT liabilities. Assets gifted during your lifetime fall outside your estate for IHT purposes if you survive for seven years after making the gift. For business owners, additional planning strategies like holdover relief could address potential Capital Gains Tax (CGT) consequences when transferring shares or other assets. With holdover relief, the recipient inherits the assets at the donor’s original base cost, thus avoiding CGT at the time of gifting.

However, gifting does present its challenges. Most importantly, these strategies are only practical if you can afford to give away assets without jeopardising your financial security. Detailed cash flow planning will help you understand how to ensure your income and future lifestyle needs remain intact. Encouragingly, the £1 million IHT relief for businesses and farms is now set to renew every seven years, similar to the nil rate band, allowing for multiple gifts over time while maintaining flexibility.

Selling assets and preparing for tax liabilities

If gifting isn’t a viable option, you might consider selling your business or land. However, this approach requires careful preparation, as the proceeds from a sale after April 2026 may attract the full 40% IHT rate on death instead of the reduced 20%. To mitigate this, families may think about placing assets in trust before a sale to shield the proceeds from the higher rate. Keep in mind, though, that the cost and administrative burden of trust arrangements are expected to increase after April 2026.

Additionally, selling assets triggers immediate CGT liabilities, so it’s vital to plan for how to meet these costs. With the current economic climate of higher interest rates, there’s growing popularity in utilising tax-efficient products like gilts or qualifying corporate bonds to generate post-sale income. These products can help preserve wealth and provide stability, especially in times of economic uncertainty. The effectiveness of this approach depends on individual circumstances and financial goals.

Life insurance as a safety net

For families concerned about funding an IHT bill, life insurance can provide an effective solution. When a significant liability is anticipated, a policy written in an appropriate trust can be specifically established to cover the IHT charge. Policies are often designed to complement other strategies, such as gifting. For example, term life insurance may be utilised to cover the seven-year period during which a gifted asset remains part of the estate.

These policies are typically affordable and, when set up through a trust, can ensure that the insurance payout is exempt from IHT. However, premiums rely on factors such as age and health. We can guide you to assess whether this is a suitable option for your needs.

Combine strategies and begin early

Given the complexity of the proposed new rules, many families may benefit from adopting a blended approach. Combining lifetime gifting, trust arrangements and targeted use of life insurance provides more flexibility to meet the challenge. The earlier you start planning, the broader the range of options available to you. Acting now allows you to align your tax strategy with your personal goals and protect the business or land you’ve worked so hard to build.

After 10 years, 232 appearances and 103 tries, the Panthers’ Halifax born winger James Saltonstall has been rewarded with a testimonial year by the Rugby Football League. Known affectionately as ‘Salty’, James’ tireless determination and effort has made him a firm favourite with both fans and players alike.

We don’t just invest in tomorrow, we invest in our local community too. Which is why we are proud shirt sponsors of James’ testimonial match at the Shay – which was originally scheduled for January but had to be postponed due to a snow-covered stadium.

We have been long supporters and partners of the Halifax Panthers and the work they do to support our local community, which is why we also sponsor the team’s Learning and Physical Disability Team.

A number of other events have also been organised where fans and former colleagues can come together, celebrate, reminisce, and raise funds in appreciation of James’ long tenure at the club.

Keep an eye on the Halifax Panther’s website and socials to learn when you can buy tickets for the rescheduled match.