Time’s ticking to be talking Trusts

Charlotte Nixon, Head of Strategic Accounts at Aviva, champions trusts as vital tools for advisers navigating IHT reform and mass affluent client needs.

With the clock ticking towards significant changes in inheritance tax (IHT) legislation in April 2027, and an estimated 20% of the UK adult population falling into the mass affluent segment [1], one tool remains consistently powerful yet underutilised: trusts. The question is, are you having enough conversations to bring trusts to the forefront of your clients’ protection strategies?

Why trusts matter more than ever

Trusts have long been a cornerstone of estate planning, offering control, protection, and tax efficiency. But with the upcoming IHT reforms, their relevance is set to surge.

From 6 April 2027, unused pensions will be included in a deceased person’s estate for IHT purposes. This marks a dramatic shift from current rules, where pensions typically fall outside the estate and can usually be passed on free of any IHT liability. The change could result in up to 10,500 estates paying IHT for the first time, and 38,500 paying more than they otherwise would have [2].

For clients with substantial pension wealth, especially those who haven’t accessed their pots or are 75 or over, this could mean a 40% tax hit on some or all of the funds they intended to pass on. Trusts can help mitigate this risk by enabling more strategic control over how assets are distributed.

The Mass Affluent: A growing opportunity

According to the Kokoro Mass Affluence Report, around 13 million UK adults now fall into the mass affluent category [1]. These individuals are financially flexible, status-conscious, and increasingly focused on long-term planning. They value control, health, and legacy and they’re actively seeking ways to protect their wealth and pass it on efficiently.

This group is also more likely to be impacted by the 2027 IHT changes, as they may hold significant pension and property assets. Advisers have a unique opportunity to educate them on the potential tax implications and empower them by using trusts as the preferred vehicle.

Building confidence, control and continuity

Advising on trusts isn’t just about tax efficiency, it’s about delivering real value to your clients. Trusts demonstrate the depth and importance of financial advice, offering tailored solutions that protect wealth, ensure faster access to funds, and support long-term legacy planning. They also help you build stronger, more meaningful relationships by addressing your clients’ personal and family goals. Crucially, trusts open the door to intergenerational advice opportunities, allowing you as the advisers to support not just the client, but their children and grandchildren too, especially in the context of rising IHT exposure.

Trusts in the Protection Toolkit

Trusts aren’t just a technical solution either, they’re a strategic enabler within your protection advice. Beyond mitigating IHT, they offer practical advantages that resonate with clients’ real-life concerns. For example, trusts can help ensure that life insurance proceeds are paid quickly and directly to loved ones, bypassing probate delays. They also allow clients to tailor how and when beneficiaries receive funds, which can be especially valuable in blended families or when supporting vulnerable dependents. By incorporating trusts into protection conversations, you can demonstrate foresight, flexibility, and a deeper understanding of clients’ evolving needs.

What you should do now

1. Review existing policies: Are they written in trust? If not, why not?
2. Educate clients: Use the 2027 IHT changes as a catalyst for conversation.
3. Segment your client base: Identify mass affluent clients who may be at risk.

Aviva offers a range of tools and support to assist with your client conversations on tax and inheritance planning and trust solutions as part of our protection tool kit.

Final Thoughts

The financial landscape is shifting and fast. With the 2027 IHT changes on the horizon, a sizeable mass affluent population, and clients increasingly focused on control, continuity and legacy, the role of the adviser has never been more vital. Trusts offer a powerful way to deliver value: they protect wealth, unlock intergenerational planning opportunities, and strengthen client relationships. Whether you're reviewing existing policies, educating clients on upcoming tax changes, or helping them plan for the future, trusts should be a central part of your protection toolkit. Time’s ticking to be talking trusts, let’s make sure your clients are ready.

Sources
1.         Kokoro The Score: Follow the money. Mass Affluence Report – July 2025

2.         Inheritance Tax on pensions: liability, reporting and payment — Summary of responses - GOV.UK Published on 21 July 2025. Contains public sector information licensed under the Open Government Licence v3.0..