Research has just been released as part of the private and commercial bank Arbuthnot Latham’s financial wellbeing report. Among its findings, only a quarter of respondents have taken measures to mitigate inheritance tax.

New research by London-based Arbuthnot Latham reveals that 74 per cent of respondents think the next generation will have the same means or be worse off financially, challenging the perception that younger generations will be better off than their parents due to economic growth and improved standards of living.

Despite this, only 14 per cent regularly discuss money and inheritance with their children or grandchildren, with only a quarter having taken measures to mitigate inheritance tax (IHT), the research shows.

Although those surveyed showed their pessimism for the financial prospects of their children and grandchildren as they face the perfect storm – a cost-of-living crisis pared with rising property prices and higher rents – it is surprising to see so few taking measures to mitigate IHT, the firm said.

Despite over half of the remaining participants saying they are looking into IHT mitigation, Arbuthnot believes that estate planning is best approached as a continuous process to ensure that it reflects the latest laws and regulations.

After speculation about potential changes to IHT in the Spring budget, the announcement that no changes will be made may have come as a shock to those who will incur charges due to lack of planning. Arbuthnot believes that people should be prepared for all situations, allowing a more secure and prosperous financial landscape to be secured for future generations.

“Conversations about passing down wealth are crucial in achieving the outcome you want,” Rachel Wyatt, wealth planner at Arbuthnot Latham, said. “Without proper estate planning, your beneficiaries are kept in the dark and this can result in relationship tensions due to uncertainty and an inability for them to plan efficiently. An estate plan gives you the tools to have a proper conversation.” 

Arbuthnot Latham partnered with Atomik Research, an independent market research agency, to survey more than 500 UK residents with investable assets of at least £100,000 ($124,000). The research, which took place between 30 November and 5 December 2023, found that 60 per cent of respondents have investable assets (excluding property assets) of between £100,000 and £499,000, and 40 per cent have at least £500,000 investable assets (excluding property wealth).