A new survey commissioned by UK wealth manager Rathbones shows that independent financial advisors have reported a surge in enquiries. Among their principal needs, clients want complex rules explained in simple terms, to keep up with potential legislative changes, and for immediate action before rules are confirmed. 

Ahead of the UK’s Autumn Budget in November, a survey commissioned by Rathbones reveals that 91 per cent of independent financial advisors (IFAs) have received an increase in client queries. These concerns relate to the potential reversal of the pension lifetime allowance abolition, possible changes to the pension tax-free lump sum, and inheritance tax. 

The current IHT allowance, which has been frozen at £325,000 ($440,000) for 16 years, will remain frozen for another five years until 2030, making more people liable to paying the tax. The £175,000 residence nil rate band hasn’t changed since 2020. One consideration for the Autumn Budget is abolishing the “seven-year rule” which enables gifts to be exempt from IHT seven years before someone dies. There have also been suggestions of taxes on property transactions and an annual property tax on high-value homes.

Among IFAs reporting an uptick in client queries, 31 per cent have seen a spike of 26 to 50 per cent, while two-thirds report an increase of 11 to 25 per cent. Over two-thirds (68 per cent) said that [responding to] clients wanting to make changes ahead of the budget is their biggest challenge.

The most common concerns raised by clients include: 
Lifetime allowance abolition changes (73 per cent)
Drawing down pensions tax-efficiently (55 per cent)
Inheritance tax planning and gifting strategies (49 per cent)
Passing on pensions to heirs (49 per cent)
Pension tax allowances (33 per cent)
Trust structures (21 per cent)
General retirement income planning (8 per cent) 

Advisors say they are facing mounting challenges in responding to this wave of concern. The top three hurdles cited include explaining complex rules in simple terms (78 per cent), keeping up with potential legislative changes (74 per cent), and clients wanting immediate action before rules are confirmed (68 per cent). 

Despite the uncertainty, advisors said they feel well-positioned to respond to any material changes announced in the Autumn Budget, with 99 per cent saying they feel either very (50 per cent) or fairly prepared (49 per cent). 

The advisor survey follows a separate Rathbones poll of 460 clients with up to £5 million in investable assets, which found that 43 per cent expect to require advice on inheritance and estate planning over the next 12 months, amid mooted changes to the inheritance tax regime. Gifting, which accounts for 11 per cent of queries, has also seen increased interest. Both areas have trended sharply upwards since the start of summer through to mid-September. 

A new YouGov poll commissioned by London law firm Kingsley Napley shows increased opposition to tougher IHT rules.

“The findings highlight the heightened anxiety among clients as they seek clarity and reassurance in an evolving financial landscape,” Faye Church, senior financial planning director at Rathbones, said. “While speculation around a reversal of the pension lifetime allowance abolition has largely flown under the radar, potential changes to the tax-free pension lump sum have dominated Budget-related conversations – yet both are top concerns among our clients.”

“Advisors are working hard to provide clarity in a fast-moving environment, but the volume and complexity of queries show just how important it is for the Budget to deliver clear, timely guidance,” she added.