Many families still find it difficult to talk openly about money.
Sometimes that creates friction between couples. Sometimes it creates confusion for children. And in many cases, the real impact is only felt when someone dies.
At Lampiers Financial Planning, we often find that estate planning is not simply about taxes. It is about clarity, communication, and ensuring the people you care about are not left trying to make sense of things during an already difficult time.
The challenge in 2026 is that more families than ever may now be exposed to Inheritance Tax—not because they live in country estates or inherited old wealth, but because of rising property prices, frozen tax thresholds, and upcoming pension changes.
How More Estates Are Being Caught
Data from HM Revenue and Customs, the Office for Budget Responsibility, and the House of Commons Library show that the number of estates liable for Inheritance Tax has been steadily rising:
| Period | % of deaths liable | Key driver |
| 2006/07 | 5.96% | Rising house prices |
| 2015/16 | 4.2% | Recovery + frozen thresholds |
| 2021/22 | 4.39% | Asset price growth |
| 2022/23 | 4.62% | Frozen thresholds + rising wealth |
| Post-2027 (projected) | Up to 8% | Pension inclusion + frozen thresholds |
From 6 April 2027, most unused pension funds and pension death benefits are expected to form part of an individual’s estate for Inheritance Tax purposes, which could bring many more families into scope.
Why Inheritance Tax Matters More Than Ever
It is easy to assume that Inheritance Tax only affects the very wealthy.
The reality is very different.
According to official UK policy, the main allowances remain frozen:
- Nil Rate Band: £325,000
- Residence Nil Rate Band: £175,000 (where applicable)
- Married couples and civil partners may potentially combine allowances up to £1 million in certain circumstances.
Now consider the average property values in places such as Bristol, alongside pensions, ISAs, cash savings, and investments.
You do not need to be exceptionally wealthy to find your estate growing beyond these thresholds.
This is what many call a stealth tax—the allowances stay still while asset values continue to rise.
What Does Inheritance Tax Actually Apply To?
Many people assume Inheritance Tax only applies to property.
In reality, your estate may include:
- Your family home
- ISAs and investment portfolios
- Cash savings
- Business interests (subject to relief rules)
- Life assurance policies (depending on trust arrangements)
- Pension funds from April 2027 (subject to current proposals)
A couple with:
- A home worth £700,000
- Pension funds of £400,000–£600,000
- ISAs and cash savings
could easily find themselves with an estate valued at over £1 million.
That is no longer unusual. In many cases, it is simply the result of working hard, paying off a mortgage, and saving consistently over time.
Common Mistakes Families Make
Money can be emotional.
And because families often avoid talking about it, we regularly see avoidable mistakes:
- Leaving planning too late
- Assuming “everything passes to the children tax-free”
- Not reviewing wills after major life events
- Outdated trust arrangements
- Ignoring pension beneficiary nominations
- Making gifts without understanding the 7-year rule
The good news is that most of these mistakes can be corrected with the right planning.
Practical Ways Families Can Plan Ahead
1. Get Your Estate Organised
Start with the basics:
- An up-to-date will
- Lasting powers of attorney
- A clear record of your assets and liabilities
2. Understand Gifting Rules
Many families can pass on wealth during their lifetime by understanding:
- Annual gifting exemptions
- Gifts from surplus income
- Potentially exempt transfers
3. Review Pension and Beneficiary Nominations
With pension tax rules changing from 2027, reviewing:
- Expression of wishes
- Death benefit nominations
- Retirement income strategy
is becoming more important than ever.
4. Consider Trust Planning Where Appropriate
Trusts are not right for everyone, but in some cases, they can help with:
- Control
- Protection
- Tax efficiency
5. Build Estate Planning Into Your Financial Plan
Estate planning should not sit in isolation.
It should be part of a wider financial plan that considers:
- Retirement income
- Family goals
- Tax efficiency
- Intergenerational wealth transfer
The Emotional Side of Estate Planning
At Lampiers Financial Planning, we encourage families to be involved in important financial conversations.
Because good estate planning is not just about paperwork.
It is about:
- Avoiding future conflict
- Creating clarity
- Helping loved ones understand your wishes
- Passing on values, not just wealth
Some of the best planning conversations happen around the kitchen table—not in a boardroom.
Final Thoughts
We believe talking about money is healthy.
And those conversations often lead to better decisions.
Estate planning is not simply about reducing taxes. It is about helping the people you care about most make confident decisions when you are no longer here.
That is something Lampiers Financial Planning has been helping families with for over 30 years.
Risk Warning
This article is provided for informational and educational purposes only and does not constitute financial or investment advice. It should not be interpreted as a recommendation to buy or sell any specific investment or to adopt any particular strategy. While every effort has been made to ensure the information is accurate and sourced from reliable materials, Lampiers Financial Planning cannot guarantee its completeness or accuracy. Opinions expressed are those of the author and may not reflect the views of Lampiers. You should always seek personalised advice before making financial decisions. The value of your investments can go down as well as up, so you could get back less than you invested. Past performance is not a reliable indicator of future performance.
A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The Financial Conduct Authority does not regulate cash flow planning
Please note that this article was written in May 2026, based on the prevailing legislation and taxation applicable at that time.
Sources
- HMRC – Inheritance Tax liabilities statistics (updated July 2025)
- Office for Budget Responsibility – Inheritance Tax forecast
- House of Commons Library – Inheritance tax: Current policy and debates (updated April 2025)
- House of Commons Library – Inheritance Tax: A basic guide
- BDO – Number of estates liable to IHT rises by 13%