Inheritance touches almost every family. Most of us will pass something on, receive something, or both. Yet it’s a subject many of us put off talking about and more often those quietly planning it find it hard to discuss with the people it affects most.
This conversation is more important than ever. From April 2027, most unused pensions will count towards your estate for inheritance tax. For many people, a pension has been the last thing the family touched, because it could usually be passed on free of inheritance tax. That is changing.
It affects a wide range of us, and you don’t need to be close to retirement for it to matter. If your children are young, your parents may already be thinking about how to help, perhaps with school fees now or a first home later. Your own pension, possibly spread across three or four old employers, is part of the picture too. It’s worth knowing what you have long before anyone inherits it.
It is important to note here that tax rules and reliefs can and do change. What applies to you will depend on your own circumstances, and what’s true today may not be in the future. We’d always encourage you to take professional advice, specific to your situation.
Increasingly, we see parents wanting to give during their lifetime rather than waiting. It’s a generous (and sensible!) instinct. The important question is whether you’ll still have enough for the twenty or thirty years ahead of you. Give too much too early, and you can end up relying on the very people you meant to help.
Then there’s the question of what happens if the unexpected comes first. Would your family know what has been planned, where everything is kept and who to call? That now includes your digital life, from bank logins to the photos only your phone holds.
On top of all this, if you run a business, it may be most of what you own. Business and family money are best looked at together, not in separate meetings years apart.
The best place to start is usually a conversation about what everyone actually wants and needs. Your parents might rather help with a deposit now than leave it in a will. You might rather they kept it for their own later years.
Most families start planning later than they should, often after something has happened. Starting earlier usually leaves more room to plan. We’re a mother and daughter business in Tunbridge Wells and London, so we know these conversations from both sides of the table. If you’d like help having yours, we’d be glad to be in your corner.
www.reddingswm.co.uk
or 0345 548 1050
