HNW and UHNW concerns ahead of Budget

Inheritance tax and changes to pensions are the two big concerns for our HNW clients.

There's so much speculation around what could change that it's very hard to plan for.

Changes to how pensions will form part of the taxable estate from 2027 have highlighted how the government may look to tighten up other ways in which inheritance tax is legally mitigated.

Gifts out of excess income, lifetime gifts and business relief are all areas that could see change.

Among our HNW and UHNW clients, the standout concern is the Inheritance Tax on pensions from April 2027— and whether the Budget might make things even worse. It’s such a hot topic that we’ve built an IHT-on-pensions calculator, allowing people to see their personal exposure (calculator: https://rowleyturton.com/calculators/iht-calculator.html). There’s also nervousness about the 25% tax-free lump sum, though I’d be astonished if any government scrapped it outright.

Many clients are worried that the upcoming Budget might reduce or remove the tax-free cash element of pensions. This is a key feature of retirement planning that lets people access part of their savings tax-free. Losing this benefit would disrupt plans for over-55s who rely on the lump sum to clear debts, help family, or fund early retirement.
Such a move would likely damage public confidence and draw criticism, so Rachel Reeves may instead consider measures like freezing the Lifetime Savings Allowance or tightening limits on tax-efficient savings such as ISAs.
There’s also speculation that she could raise revenue through property taxation such as cutting capital gains relief on second homes, increasing stamp duty on expensive properties, or introducing an annual property tax on wealthy homeowners. This last option could hit asset-rich but income-poor retirees especially hard, reinforcing the importance of sound financial planning ahead of the Budget.