Financial advisers are turning away from pension wrappers and instead utilising pension gifting, annuities and onshore bonds as they prepare for the upcoming changes to inheritance tax, according to a new report.

Three quarters (76%) of financial advisers surveyed for The Lang Cat’s latest platform report are planning to deploy pension gifting strategies, 51% are boosting trust useage, and 30% are increasing client allocations to onshore bonds.

Advised platforms reported record high outflows of £65.8bn in 2024 as financial advisers turned to annuities and cash products.

Two thirds of advisers (67%) said they had recommended annuities more in 2024. Annuity sales have rose 34% to £7bn in 2024, according to data from the Association of British Insurers.

Advisers were confident that the Government’s proposed inclusion of pensions within the inheritance tax net from 2026 would go ahead, with just 3% of advisers surveyed by The Lang Cat believing the changes would not go ahead.

Other changes made in the November Budget have also impacted advisers’ plans, according to the report.

Onshore bonds jumped to become the second-largest source of net platform sales, after pensions, due to capital gains tax cuts denting the appeal of general investment accounts.

Rich Mayor, senior analyst at The Lang Cat, said: “Pensions have long been the engine of platform growth. But that seems to be changing. The IHT reforms expected in 2027 are likely to mean higher outflows from pension wrappers and will likely accelerate adviser shifts to annuities, trusts and onshore bonds. We’re already seeing the data reflect that shift.

“As the financial advice landscape reshapes itself around fiscal policy and economic volatility, one thing is clear: agility and innovation are no longer optional for intermediated platforms. They’re survival strategies.”