For our February Protection Forum part two, we brought together advisers and insurers to discuss:
‘The impact of The Budget on Protection & IHT’
The second half of the session focused on the impact of budget proposals on protection and inheritance tax (IHT), particularly around employer National Insurance changes, pensions, and estate planning.
Andy Woollon highlighted opportunities for relevant life policies, whole of life insurance, and gift inter vivos plans to help mitigate IHT liabilities, especially for high-net-worth individuals and business owners. He also discussed the potential implications for farmers facing new tax thresholds and the challenges surrounding pension IHT reforms.
Toby Corden emphasised the importance of ensuring firms and advisers stay within their regulatory scope when discussing trusts and IHT, suggesting that better industry collaboration on trust documentation could simplify processes for clients. He also stressed the need for clear referral pathways to tax specialists and financial planners, ensuring that customers receive informed, compliant advice. The discussion underscored the growing importance of strategic tax and protection planning in response to legislative changes.
See the session highlights below, and listen to the full audio:
“We are all trying to support you to help protect customers at the end of the day as indeed is everybody on this call.”
“Just speak to your protection consultant or the technical team that all of us in companies have, and we will do our utmost to try and support you.”
“We only offer guaranteed Whole of Life. We don’t offer reviewable Whole of Life. And as with a lot of providers, we all moved away from reviewable whole of life premiums generally to guaranteed premiums some years ago.”
“If all those were the same for us all, we’d end up with a model where there was only one or two super large insurance companies.”
“There is already a protection solution available for employees, and that is relevant life policies. These policies offer tax-efficient cover and are expected to remain outside of the proposed IHT changes.”
“Some networks have already done their compliance work and are happy for their advisors to start recommending whole of life to cover the pension IHT liability.”
“Given the budget proposals, we may start seeing more clients making gifts to mitigate IHT, which creates an opportunity for joint life second event term plans or gift inter vivos policies.”
“The average farmer earns about £27,000 a year. If their farm exceeds the new IHT threshold, they could be facing significant tax liabilities that they may struggle to pay.”
“With the consultation still in progress, we don’t yet have all the details on how pension IHT will be implemented, but it’s clear that the direction of travel is set.”
Click the audio playback below to listen to the full session.
Full session audio
Part 2:
“It’s just making sure we’re recognising when a client’s needs are going beyond our own firm’s scope of advice and making sure you’ve got those clear referral pathways to signpost them to get that qualified advice.”
“We can inform them and give them the information for trusts, but there is a risk if you’re advising or straying into that advice piece on the trust piece, especially with regards to tax planning.”
“We’ve seen a precedent set for creating a universal trust covering multiple insurers, so why can’t we get something out which is available for everybody to use?”
“We need to be mindful that if firms don’t have the proper authorisation and advisors don’t have the right qualifications, they should not be straying into IHT planning advice.”
“Many intermediary firms operate on a non-advised basis when it comes to trusts, providing customers with enough information to make an informed decision rather than advising on specific trust options.”
“More providers should be making digital trust processes simpler for clients, with clear, consumer-friendly decision trees rather than complex legal documents.”
“If you don’t have IHT permissions, think about who you could partner with to refer cases rather than risk stepping into an area outside your authorisation.”
“It’s about providing the best outcome for customers while staying compliant – if that means referring to a specialist firm, that’s the right approach.”
