Quarterly Financial Planning Game Changers

The government has confirmed it intends to go ahead with plans to include unused pension funds and death benefits in inheritance tax (IHT) calculations from 6 April 2027. 

1. Pensions Move from Retirement Tool to Estate Tax Trigger – Urgent Action Needed 

This marks a significant shift. Pensions have long been used as a tax-efficient way to pass on wealth. Under the new rules, any unspent pension at death will be considered part of the estate for IHT purposes. Around 10,500 estates are expected to be brought into scope for the first time, and many more will face increased liabilities, with some families facing hundreds of thousands of pounds in new tax. 

Why This Matters Now:

• The change repositions pensions back to their original purpose: funding retirement, not legacy planning 
• High-value pensions that were being preserved for inheritance now require active planning to avoid unnecessary taxes.

Suggested Actions For Your Clients:

• Review drawdown strategies – should clients begin accessing pensions earlier? 
• Update estate plans – including death benefit nominations and Wills 
• Model IHT exposure – particularly for clients with pensions over £1m 
• Consider life cover, gifting strategies, and wider estate planning – to help minimise the future tax burden 
• Engage executors early – they will become responsible for IHT reporting and payment, not the pension provider. Ensuring they understand the process and the plan in place is now essential 

The Opportunity:

This is a chance to reposition the pension as a retirement income source rather than a tax-exposed inheritance pot. With robust planning before April 2027, clients can reduce tax exposure, support their families, and make better use of their resources during their lifetime.  

2. Shareholder Agreements Are Not Enough – Is There a Plan to Fund Them?

It’s common for business owners to have shareholder agreements that set out what happens if a co-owner dies or becomes critically ill. But too often, the funding behind those agreements doesn’t exist, leaving the remaining shareholders and the deceased’s family in a difficult position. 

Without an insurance-backed solution, the agreement becomes just words on paper, creating delays, uncertainty, and often disputes over share valuation and liquidity. 

Why This Matters Now:

• In growing or newly restructured businesses, business protection is frequently overlooked 
• Cross-option agreements need to be supported by appropriate life (and potentially critical illness) cover to ensure the business has the liquidity to buy out the deceased’s estate 
• With Business Relief planned to be capped, more business assets may become subject to inheritance tax 
• Where new investment is coming in, especially from private equity or venture capital, investors are increasingly requiring protection to be in place to safeguard their capital 
• If you’re advising on shareholder agreements, succession planning, or M&A, the protection conversation needs to sit alongside it 

Suggested Actions For Your Clients:

Check if cover is in place – many clients assume it is, but it often isn’t 

• Raise protection as part of broader succession planning – especially if the business has grown, changed hands, or taken on external capital 
• Model the impact – how would the business cope financially if a shareholder died tomorrow? 

The Opportunity:

Protection provides the liquidity needed to deliver agreements in practice, support surviving shareholders, and secure family outcomes. It also reduces risk for incoming investors and strengthens the business’s overall resilience. 

3. Rising Costs, Bigger Risks – Time to Revisit Protection  

In recent years, much has changed. Mortgage payments have increased. Cost of living pressures have grown. Salaries and financial commitments have shifted. But for many clients, their life cover, income protection, or critical illness arrangements remain exactly as they were, designed for a very different time. 

That’s a problem. Outdated cover can leave clients exposed at the moment they need support most. 

Why This Matters Now:

• Clients may have increased borrowing, taken on a larger mortgage, or started a family 
• Inflation and interest rates have driven up monthly commitments, meaning any loss of income could be more damaging 
• Many rely on employer-provided protection, but benefits may be limited, capped, or not tailored to their needs 
• Life events like marriage, children, divorce, or career changes all impact what protection is appropriate 

Suggested Triggers For Conversation:

• Have your clients recently re-mortgaged, moved, or taken on new responsibilities? 
• When did they last review their income protection, critical illness, or life cover? 
• Are they relying solely on workplace benefits they don’t fully understand? 
• Would their family be able to cover costs if something happened? 

The Opportunity:

Helping clients realign their protection with their current reality is a quick, high-impact way to strengthen their financial plan. It’s often the entry point to wider planning, especially for younger clients, homeowners, and growing families. 

4. Big Cash Event? We Can Have Everything in Place for Day One

Following a business sale, inheritance, divorce settlement, or bonus, clients are often left holding substantial cash. It’s a pivotal moment, yet many don’t know what to do next, and capital ends up sitting idle in low-interest accounts while they figure it out. 

We can help avoid that. We make sure everything is in place so that, on day one, the money can be deposited and start working immediately. 

What We Can Do:

• Arrange a secure, flexible cash solution in advance of the transaction completing 
• Ensure funds are earning interest from day one 
• Begin working with the client on a longer-term financial plan tailored to their goals 

Why This Matters:

• Clients often hesitate after a liquidity event, but the clock is ticking on missed earnings 
• If the sale involved Business Relief–qualifying assets, there’s a limited window to reinvest into qualifying replacements to maintain relief from inheritance tax 
• Knowing they’re earning from day one gives them the confidence to take time on the longer-term strategy 
• It shows immediate value, while also setting up a clear planning framework for what comes next 

Suggested Triggers For Conversation:

• Do you have clients nearing a sale, divorce finalisation, or inheritance? 
• Are they unsure whether to repay debt, invest, or wait? 
• Are they asking for a “safe place” to hold funds temporarily? 

The Opportunity:

You don’t need to wait for the transaction to complete to start planning. We can put the right structure in place now, so your client’s money works harder, right away. 

Let’s chat, we’re available on 020 7467 2700 and at hello@firstwealth.co.uk.

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.