London leads the UK in avoiding discussions of inheritance, with new research showing around 44% of people in the capital have never discussed the topic.
The research — undertaken by YouGov for UK wealth management firm Mattioli Woods — also showed significant gaps in knowledge of basic inheritance tax (IHT) issues.
For instance, only 15% are aware of the nil-rate band allowance — the amount of an individual’s estate that can be passed on tax-free — and the residence nil-rate band allowance — a further tax-free allowance available when leaving one’s main residence to direct descendants.
Amit Joshi, managing director of Wealth at Mattioli Woods, said: “The reluctance to talk about inheritance is understandable, but it can leave families unprepared at a time when clarity matters most.
“When these conversations are delayed, important financial and emotional decisions are often left until moments of stress or urgency, when it is harder to reflect clearly or act in a coordinated way.”
A quarter of over-55s and 35% of 45–54-year-olds also say they have never openly discussed inheritance with their family, with emotional discomfort, privacy concerns, and views that the discussion is ‘too early’ being cited as the main reasons.
Only 35% understand that pensions will become subject to Inheritance Tax from 6 April 2027—a measure introduced in the Labour government’s 2024 Budget to prevent pensions being used as a way of transferring wealth inheritance tax-free.
Richard, 68 and from London, said: “I’ve spoken to my children about inheritance in detail. I want all of us to have at least some idea about these things from an early stage.
“I think a lot of people don’t discuss this, partly because there is an embarrassment about wealth—in London in particular.”
Asked if he knew about key IHT concepts, he said he did.
“Knowledge of inheritance issues is also partly a matter of background,” he said.
“Take someone who works in finance, for instance — they understand financial prudence because it’s what they do for work every day. Or indeed people who work in the corporate sector.
“A bricklayer, on the other hand, isn’t likely to be well-versed in these issues.”
Jamie, 54 and from London, said: “I haven’t discussed inheritance or anything around it with my daughter. Not so much out of discomfort — I just think it’s a bit too early to have those conversations. I hope so anyway.”
Asked whether he knew about the nil-rate and residence nil-rate band allowances, he said he didn’t.
“I’d certainly encourage people my age to know as much as they can about legal and tax issues around inheritance—that way you can start planning, and so can your kids,” he said.
Currently, a 40% IHT rate is charged on the value of estates after the tax-free bands allowances.
However, both the nil rate and residence nil rate band allowances – £325,000 and £175,000, respectively – are set to remain frozen until at least 2030, dragging more families into the taxable brackets due to rising house prices.
As of April this year, farms and businesses are also subject to new IHT rules, as the 100% relief from IHT is capped to qualifying assets up to £2.5m, with a 50% relief rate on amounts over this value.
Photo credit: Christopher Bill via Unsplash
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