Wealth manager Quilter saw a 200% increase in the number of Lifestyle Trusts opened in 2024 (year-on-year).

Uptake in 2025 is on track to far surpass the 2024 level, as clients reconsider how their wealth is structured for future generations with pensions set to come into scope for inheritance tax (IHT) from 2027.

Rachael Griffin, tax and financial planning expert at Quilter, said: “The Financial Planning landscape is undergoing a significant shift, and with pensions set to come into scope for IHT in 2027, many advisers and their clients are reassessing wealth structures to safeguard financial legacies. The demand for trusts is increasing as clients seek efficient ways to mitigate inheritance tax and maintain control over their financial futures.”

Quilter has created a new Lifestyle Trust policy fund management tool to support advisers with clients looking to open trusts. The tool is designed to simplify the setup and ongoing management of Lifestyle Trusts.

The new tool provides an easy way to set up and manage policy fund entitlements for Lifestyle Trusts by:

• Automatically creating a detailed schedule of entitlements, showing the number of policy funds accessible in each policy year.
• Generating a ‘second schedule’ that can be printed and incorporated into the Lifestyle Trust Deed, making the setup process seamless.
• Keeping track of any revised entitlement dates and generate the necessary paperwork for deferrals.

The wealth manager has also developed a suite of ‘how-to’ guides for each of its trusts.

Separate research from investment platform AJ Bell found that over half (53%) of advisers have had new clients approaching them seeking advice as a result of the proposed plans to tax IHT on pensions, with 84% of the 301 advisers surveyed saying queries around estate planning have increased.

According to research from The Lang Cat, 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.

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.

Inheritance tax receipts for April and May 2025 hit £1.5bn, a £98m rise on the same period last year. An increase of 7% on the same month of 2024, according to the HMRC data.

The OBR’s most recent forecast, published at the Spring Statement, projects another record year with IHT predicted to generate £9.1bn in 2025/26 and revenues are expected to raise more than £14bn by 2029/30.