Inheritance tax remains an area of concern for 40% of people, who say they are concerned about paying the death tax, while the majority (70%) are doing nothing to reduce a potential bill.

A fifth of consumers (20%) have taken some level of action to mitigate a potential inheritance tax bill. Of these, 7% have taken professional financial advice, 7% have made gifts to family members, 4% have set up trusts, 3% have invested in alternative asset classes and 5% have a suitable life assurance policy in place, according to research, co-sponsored by Canada Life as part of an AKG briefing paper.

However, almost a quarter (23%) of people have given no thought to inheritance tax planning, leaving some at risk of being caught by a tax net with thresholds that are set to remain frozen for five years.

Hacker Young has warned that in future even more estates are likely to be caught by inheritance tax as in the March Budget, Chancellor Rishi Sunak announced that both the nil rate band and residence nil rate for inheritance tax would remain frozen at existing levels until April 2026.

For tax year 2020-21, the amount of inheritance tax paid by taxpayers jumped 19% with HMRC collecting £6.01bn over the last 12 months compared to £5bn in the previous year.

Sean Christian, MD and executive director, wealth at Canada Life: ‘There is clearly a huge opportunity for further education and guidance when it comes to inheritance tax planning. Families have been through intense strain over the last 18 months, with many being faced with difficult discussions and decisions that may have previously been brushed under the carpet.

‘Demand for advice will grow, largely driven by societal shift and demographic change but also financial priorities following the pandemic. But as an industry we need to be clear how we can best serve these clients today and also the clients of the future in an efficient and scalable way. Building relationships with the wider family earlier by having the conversations which span generations will clearly demonstrate both the role and value of advice.

‘The industry should be seen as being on the front foot for intergenerational planning and feeling better equipped to start the conversation.’