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The ‘Accidental Millionaires’ Facing Unexpected Tax Bills

ended 24. April 2026

Scott Gallacher of Rowley Turton says he’s seeing an increasing number of what he calls “accidental millionaires” — clients who don’t feel particularly wealthy, but whose assets now tell a different story.

“When we actually tot everything up — the house, pensions, investments — people are often surprised by how much they’ve accumulated,” he says.

Rising house prices, strong investment returns over the past three years, and decades of steady saving are pushing more people over the £1m mark, often without them realising the potential tax consequences.

Inheritance tax is also becoming a bigger part of the government’s takings, with receipts now at a record £8.5bn. With pensions due to come into scope for IHT from 2027, that’s only likely to increase.

Against that backdrop, Gallacher believes it’s hard to see any meaningful cuts to IHT or increases to thresholds any time soon.

We’re looking for views from advisers and industry experts on:

  • Are you seeing more clients drifting into “paper millionaire” territory?
  • How much have recent investment returns accelerated this?
  • How much of rising IHT receipts is down to frozen thresholds?
  • What impact will the 2027 pension changes have in practice?
  • Are clients aware, or is this catching them out?
  • What mistakes are people making?
  • What should people be doing now to plan ahead?

Any insights, examples or real-world experience would be very helpful.

4 responses from the Newspage community

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Scott Gallacher
Director at Rowley Turton
When balanced funds are up over 30% in three years and cash is finally paying a decent return again, it doesn’t take much for people to drift into ‘millionaire on paper’ territory — even with property prices treading water. It’s happening quietly, and often without people realising the tax implications. The inclusion of pension funds within the IHT net from April 2027 could mean that many estates face six-figure tax bills almost overnight, often catching families completely off guard.
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Graham Nicoll
Financial Planner, Chartered FCSI at NCL Wealth Partners
Frozen NRBs and RNRBs, and now the inclusion of pensions in the estate from April 2027, has led more people to be captured for IHT, often unknowingly.
I met a 79 year old unmarried female in Cambridge recently, who will not be impacted by the pension changes due to having a DB scheme from her days as a teacher. However, her home will take her well over her combined NRB and RNRB and with 2 rental properties that top up her retirement income she will have a £350k IHT liability.
This means her desire to pass the family home to her daughters and the flats to her grandchildren will be thwarted by the need to see a combination of them to meet the IHT bill. So her hard work throughout her life will result in a significant IHT bill.
Planning ahead, thinking about income needs, asset mix and short v long term goals is keep to living the life for today while protecting the legacy for the future.
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Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
More and more clients who have worked hard and been prudent, who definitely wouldn’t consider themselves wealthy, are being caught in the IHT stealth tax. With pensions now set to be included in the calculation, you could have a very modest house and pensions that won’t produce an elaborate income for you, and you’ll still have to folk out extra tax at 40% when you die. Brining pension into the regime and freezing the allowances for a decade is the ultimate tax grab on hard working families.
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Rohit Parmar-Mistry
Founder at Pattrn Data
Yes, more people are drifting into what you could call paper millionaire territory, but that label can be misleading. In many cases this is not a story of lavish wealth. It is a story of long term home ownership, pension growth, steady saving, and frozen tax thresholds quietly colliding.

That is why people are getting caught out. On paper, a house, pension pot, and investment portfolio can add up quickly, especially after strong asset growth over recent years. But many clients do not feel wealthy in any practical sense, so they have not planned as if inheritance tax is their problem. Fiscal drag is doing a lot of the work here.

The 2027 pension changes could sharpen that further by pulling more estates into scope and forcing families to think earlier about structure, gifting, and succession. The biggest mistake is delay. People leave planning until a health scare, a death in the family, or a tax shock focuses the mind. By then, the best options are usually narrower, slower, and more