With the Autumn Budget fast approaching on 26 November, new data from the latest Saltus Wealth Index Report reveal that high net worth individuals (HNWIs) in London see Inheritance Tax (IHT) as one of the most unfair elements of the UK’s tax system – and are increasingly concerned about the impact of new rules bringing pensions into scope for IHT liabilities from 2027.
The survey of 2,000 HNWIs across the UK with at least £250,000 in investible assets, from wealth management firm Saltus, shows that 16% of those based in London believe IHT is the most unreasonably high tax, well ahead of Capital Gains Tax and Corporation Tax. When asked where the threshold should sit, the average response was over £600,000, highlighting how out of step the current £325,000 nil rate band has become since it was introduced in April 2009.
HMRC data show that IHT receipts reached a record £8.2 billion in the 2024-25 tax year – £0.8bn higher than the same period the year before – underlining how frozen thresholds are drawing more households into the tax net. The five months to August 2025 alone saw IHT receipts reach £3.7bn.
The introduction of Inheritance Tax on defined contribution pensions from April 2027 is sharpening concern among HNW households in London. Over a third (37%) of respondents say they are already exploring strategies to protect their pension from IHT, while 32% are reviewing or adjusting their pension savings or retirement planning ahead of potential legislative changes.
There has also been growing speculation in recent weeks about whether future fiscal events could target other pension benefits – including the 25% tax-free lump sum entitlement – although most experts view such a move as politically risky and technically complex. This speculation has fuelled further unease among savers already adapting to the new inheritance tax rules.
The findings suggest that tax anxiety is now one of the biggest drivers of financial planning and private wealth management among London’s HNW investors, with a growing number looking to trusts or other vehicles to manage future exposure.
Inheritance Tax is seen as an increasingly attractive target for incremental revenue in the forthcoming Autumn Budget, whether through tightening taper relief, freezing allowances, or adjusting the rules on lifetime gifting. More than a third (36%) of HNWIs in London believe Labour will raise IHT again, despite widespread criticism of the reforms introduced at the previous Budget. Nationally, the data reveals that the majority (53%) of those who voted Labour now regret this decision due to IHT.
The decision to include pensions in the IHT net from 2027 is already estimated to bring tens of thousands of additional estates into scope for the first time. Three in ten (30%) HNWIs in London say they are worried about how these rule changes will affect how they pass on their pension benefits, while others admit they are unsure how the new framework will work in practice.
The Wealth Index Report also found that support for reform of IHT is strong, with almost a third (31%) of HNWIs in London believing it should be abolished entirely. Additionally, over four in ten (44%) think the threshold should be raised, from the current £325,000 – frozen until 2030 – with respondents’ average preferred threshold sitting at over £600,000, nearly double the existing level.
Alex Pugh, financial planner at wealth manager Saltus, said: “Tax has become one of the biggest sources of uncertainty for clients this year, not just because of what’s been announced, but because of what might come next. Inheritance Tax in particular is politically sensitive, and the decision to bring pensions into scope from 2027 has really sharpened focus on long-term planning. Many clients are asking whether the rules could change again, and how to prepare without making reactive decisions.
“The most common question I’ve had recently is about tax-free cash. Clients are understandably nervous about whether that could be targeted next. This concern underlines just how much confidence has been shaken by the pace of change.
“Now more than ever, clients need to approach inheritance and legacy planning thoughtfully. There’s no one size fits all answer. Strategies like annuities, gifting or business relief investments all have a place depending on individual goals. What matters is keeping planning aligned to values and long-term objectives, rather than reacting to every headline.”
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