HSBC Life: Advisers Warn Financial Planning Is Becoming Harder

by | Jun 6, 2023

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More than two out of three advisers believe financial planning has become harder over the past five years as tax changes combine with political and economic uncertainty plus market volatility, new research* from HSBC Life (UK) Limited shows. 

This research, for a new report from HSBC Life (UK) Limited, The Three I’s of Investable Capital, in association with consultancy Technical Connection, found 69% of advisers believe making investment, taxation and financial planning decisions has become more difficult in the past five years. Their concerns are mirrored by clients: 62% of advised clients agree financial decision making has become more challenging.

The research helps inform HSBC Life (UK) Limited’s report which documents the capital investment landscape and outlines the opportunities to deliver great client outcomes by the appropriate use of tax effective investment wrappers, such as onshore bonds, together with the underlying investment products available.

It analyses the host of tax changes from 2022’s Autumn Statement and this year’s Budget on income tax, pensions, Capital Gains Tax, and dividend taxation, and focuses on investment for capital growth, income, and intergenerational transfer.


Analysis in the report highlights that around 63% of tax receipts in 2023/24 will be delivered by Income Tax, National Insurance contributions and VAT, underlining how tax from individuals is a significant source of income for the Treasury. Similarly, Capital Gains Tax is projected to deliver 1.9% of receipts while IHT will produce 0.8%.

The report notes that this could “explain why some structures such as the taxation rules for investment bonds have had little fundamental change for decades. Against all the other uncertainties in investment life, investors can take some reassurance from this.” Going forward with the frozen and reduced allowances that are now part of the tax landscape, utilising tax effective structures for investments takes on increased importance.

Mark Lambert, Head of Onshore Bond Distribution, HSBC Life (UK) Limited, said: “By focusing our report on The Three I’s of Investable Capital, we reviewed in depth the role investable capital plays in the fulfilment of financial plans as part of a commitment we have to support our adviser partners.


“We hope that the insight secured from the research for the report will contribute towards better adviser understanding of potential investor concerns and aspirations in relation to investable capital, both important considerations in delivering good customer outcomes, a key component of the new Consumer Duty rules.”

The report analyses the full range of investable capital assets including equities, collective investments such as unit trusts and OEICs as well as ISAs, onshore and offshore bonds, defined contribution and defined benefit pensions, VCTs, EIS, SEIS, structured investments, and crypto investments.

It outlines how capital investments can be structured to achieve intergenerational and estate planning as well as the role of initial and ongoing advice in ensuring an optimal outcome from the investment of capital and the potential future tax treatment of capital investments.


Onshore bonds offer zero tax on cash dividends at a policyholder level while non-dividend income is taxed at 20%. Gains within the Bond are subject to UK life fund taxation which means that the policyholder is treated as having paid basic rate tax on these gains. Top slicing relief and 5%p.a. tax deferred rules on withdrawals remain. Lifetime transfers by way of assignment are not taxable events and basic rate tax credit in determining policyholder tax on realised chargeable gains continue.

The HSBC Onshore Investment Bond, a tax effective medium to long term lump sum investment wrapper, can be accessed with a minimum investment of £15,000 providing the potential for capital growth while still allowing clients to make withdrawals from their investment. It offers clients access to around 3,800 funds via open architecture.

HSBC Life (UK) Limited does not replicate funds offered by external fund managers. It enables investment in the funds directly, ensuring that consistency of approach across the investment solutions that advisers recommend to their clients. 


Please click here to download the report:

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