29
Jun
Publications, Tax Efficient
Publications are no longer accredited as of 21 September 2023.

The baby-boomer generation (those born between 1946 and 1965) control 80% of private wealth in the UK by some estimates. As they are now starting to retire, their financial objectives are changing, and they are starting to consider estate planning issues. However, they are faced with making provision for much longer retirements than any previous generation. This is where BPR comes in, allowing investors to mitigate IHT without giving up control of their assets or sacrificing growth.

At the other end of the scale, BPR can help those baby-boomers whose parents are still alive but who have not made any provision for estate planning. With only a two year time-frame for 100% IHT exemption and as the only choice in scenarios where a lasting power of attorney is in place, BPR is also a good option for the very elderly.

Advisers are aware of this, but many have been hesitant to use BPR as the perception is that it is risky and opaque. This annual Industry Report raises awareness and brings transparency to the sector, providing advisers with an ongoing, up to date resource that gives them more confidence to invest their clients money in these products.

Key Findings:

  • Although the new Residence Nil Rate Band is set to reduce the number of estates caught by IHT from 2016/17, that reduction is expected to be short-lived and the number of families affected will be on the rise again by 2020
  • Only 14% of adults know what the current IHT threshold is, and almost a third of homeowners aged 70+ haven’t considered IHT mitigation
  • 77% of advisers think that use of BPR will either increase or stay the same over the next two years
  • The average annual return BPR products target has increased to 4.26%, reflecting growing demand for estate planning solutions that don’t sacrifice returns
  • The use of BPR is growing: the cost to Treasury rose by almost 100% to £415m from 2007 to 2014

 

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*Intelligent Partnership was named Joint Winner of the Best Innovation Award at the 2014 EISA Awards for its Alternative Investment Report Series.