Clients seeking changes ahead of Budget biggest challenge for two-thirds of IFAs

Independent financial advisers have reported a surge in enquiries, with over two-thirds (68%) saying that clients wanting to make changes ahead of the Budget is their biggest challenge, according to Rathbones, one of the UK’s leading wealth and asset management firms.

The findings from an independent study of 100 peer-group independent financial advisers (IFAs), commissioned by Rathbones, reveal that 91% of advisers have experienced an increase in client queries. These concerns are primarily focused on the potential reversal of the pension lifetime allowance abolition, possible changes to the pension tax-free lump sum, and inheritance tax. 

Among IFAs reporting an uptick in client queries ahead of the Budget, nearly a third (31%) have seen a spike of 26–50%, while two-thirds (66%) report an increase of 11–25%. 

The most common topics raised as areas of concern by clients include: 

• Lifetime allowance abolition changes (73%)
• Drawing down pensions tax-efficiently (55%)
• Inheritance tax planning and gifting strategies (49%)
• Passing on pensions to heirs (49%)
• Pension tax allowances (33%)
• Trust structures (21%)
• General retirement income planning (8%) 

Advisers say they are facing mounting challenges in responding to this wave of concern. The top three hurdles cited are: 

• Explaining complex rules in simple terms (78%)
• Keeping up with potential legislative changes (74%)
• Clients wanting immediate action before rules are confirmed (68%) 

Despite the uncertainty, advisers feel well-positioned to respond to any material changes announced in the Autumn Budget, with 99% saying they feel either very (50%) or fairly prepared (49%). 

The adviser survey follows a separate Rathbones poll of 460 clients with up to £5 million in investable assets, which found that 43% expect to require advice on inheritance and estate planning over the next 12 months, amid mooted changes to the inheritance tax regime. Gifting, which accounts for 11% of queries, has also seen increased interest. Both areas have trended sharply upwards since the start of summer through to mid-September. 

Other areas of client interest include tax efficiency (14%), later life planning (10%), retirement and pensions (9%), and cashflow management (5%). Ethical and impact investing, philanthropy, school fees, and mortgages each make up a smaller proportion of queries but remain relevant for specific client segments. 

Faye Church, Senior Financial Planning Director at Rathbones, says: “The findings highlight the heightened anxiety among clients as they seek clarity and reassurance in an evolving financial landscape. While speculation around a reversal of the pension lifetime allowance abolition has largely flown under the radar, potential changes to the tax-free pension lump sum have dominated Budget-related conversations – yet both are top concerns among our clients.

“Advisers are working hard to provide clarity in a fast-moving environment, but the volume and complexity of queries show just how important it is for the Budget to deliver clear, timely guidance.”