Key facts
- Wealthy Britons are anxious about the upcoming UK Budget.
- Concerns include investments, retirement plans, and inheritance.
- 21% of the mass affluent are unsure about their inheritance plans.
- 23% of mass affluents lack confidence in tax preparation.
- 27% of 34-54 year olds lack confidence in retirement plans.
Wealthy Britons are expressing anxiety over potential tax changes in the upcoming UK Budget, according to Ian Rand, chief executive of Monument Bank. The bank's research indicates that individuals with significant financial assets are concerned about their investments, retirement plans, and inheritance strategies.
More than one-fifth of the mass affluent population, defined as those with over £100,000 in financial assets excluding their primary residence and pension, are unsure about their inheritance plans. Additionally, 23% of this group lack confidence in handling tax preparation independently, and 27% of those aged 34-54 reported a lack of confidence in their retirement planning.
Economists widely anticipate that the Budget, expected to be presented by Rachel Reeves, will introduce tax increases affecting accumulated wealth, such as pensions and property. While specific tax rates like income tax, VAT, and national insurance are expected to remain unchanged, measures targeting capital and wealth are anticipated.
Financial advisors are observing increased interest in pension tax changes, with some clients inquiring about potential restrictions on the tax-free lump sum withdrawal, currently capped at £268,275. The Institute for Fiscal Studies has suggested lowering this allowance to £100,000. Advisors are cautioning clients against impulsive decisions, recommending that any financial actions should align with pre-existing plans.
Concerns also extend to inheritance tax (IHT), which is levied at 40% on estates exceeding £325,000. Many individuals are reportedly utilizing the seven-year gifting rule to reduce potential IHT liabilities, fearing that the rules may become less generous. The "gifts out of surplus income" exemption is also being explored.