Over seven in ten financial advisers (71%) are worried about the impact of pensions becoming liable for inheritance tax (IHT) from 2027, according to new research.

Over half of advised clients (52%) will be impacted by the rule change, according to a survey of 460 IFAs by Quilter.

Under plans announced by Chancellor Rachel Reeves in her Budget inherited pensions will be subject to IHT from 2027.

The advisers surveyed by the wealth manager said 38% of their client book will need ‘rewrapping’ into alternative tax wrappers within the next 12 months as a result of the rule change.

Advisers said they were revisiting strategies such as gifting surplus income, using trusts and considering investment bonds to help clients preserve wealth.

Some 4 in 5 of those surveyed (80%) said they were seeking more inflation on IHT and trusts, 58% of advisers were looking for guidance on reframing pensions as a result of the changes, and 52% of advisers said they were looking for further insights into investment bonds.

Roddy Munro, head of technical sales at Quilter, said: “The inclusion of pensions within Inheritance Tax (IHT) will fundamentally alter how wealth is structured for inheritance. This announcement, along with others in last year's Autumn Budget, has shone a spotlight on the importance of estate planning, forcing many to rethink traditional IHT and retirement planning strategies.

“This shift presents a significant opportunity for advisers to demonstrate the value of their expertise, as clients now more than ever need professional advice to avoid a substantial increase in their tax burden.

“We are already witnessing advisers seeking a broader array of tax wrappers and trusts to adapt to the evolving landscape. As fiscal policy continues to evolve, it is crucial for advisers to have access to clear, practical solutions to help their clients achieve the best possible financial outcomes.”

A separate survey from SSAS provider WBR Group found that there is overwhelming opposition from the pensions industry to the proposed introduction of IHT on unused pensions.

Nine in ten (90%) of industry professionals polled agreed or strongly agreed that the introduction of IHT on unused pensions is both retrospective and unfair.

Almost all, 99%, agreed or strongly agreed that the proposals will act as a major disincentive for consumers to engage with pensions.

The IHT changes have already triggered a shift in the advice IFAs are providing clients, according to Standard Life.

Four fifths of advisers, 82%, said they had re-evaluated the role of pensions in client planning following the 2024 Budget with one in ten (10%) undertaking a full review across their clients.

Two-thirds, 69%, have recommended clients increase retirement income withdrawals, and three-quarters, 74%, have re-evaluated the role of annuities, with more than a quarter, 27%, increasing the number of annuity purchases they are recommending.