Millions left unprepared as many adults never discuss parents' inheritance plans, survey finds

A substantial share of adults have never discussed their parents’ inheritance plans, leaving many at risk of unexpected tax bills and estate disputes as billions of pounds in assets are expected to transfer between generations in coming years.

Some 36% of Generation X — people aged 44 to 59 — said they have not talked with their parents about inheritance plans, according to figures published by wealth manager Charles Stanley. The research found that almost nine in 10 millennials (89%) reported they had not discussed their parents’ inheritance plans, while 27% of millennials said they did not know what those plans were.

The findings come amid signs that more estates may become liable for inheritance tax. HM Revenue & Customs figures show inheritance tax receipts rose to a record £3.1 billion between April and July, about £200 million higher than the same period a year earlier, and are on track to reach £9 billion by the end of the tax year.

Lisa Caplan, director of Charles Stanley Direct advice and guidance, said frozen tax thresholds and forthcoming changes to how pension assets are treated will increase the number of estates subject to inheritance tax. "With thresholds frozen until 2030, and pension assets being included in estates from 2027, the number of families finding themselves having to pay IHT on their loved ones' estates is set to grow sharply," she said. She urged people to understand the value of their estates, make plans for passing on wealth and communicate those plans with family.

Industry research has also highlighted a reliance on inheritances to fund retirement. Data from investment platform Hargreaves Lansdown cited by financial press indicates about one-third of people expect to rely on an inheritance to help finance their retirement, a factor that could leave households vulnerable if plans are not discussed or do not materialise.

Charles Stanley's research also found gaps in wills and estate planning among older generations. About one-fifth of baby boomers had not drafted a will, the study said, a situation that could lead to assets being distributed under the rules of intestacy rather than according to an individual’s wishes.

Experts say failing to discuss inheritance can mean beneficiaries are unprepared for money they receive and the associated tax implications. Inheritance tax is charged at 40% on estates above the nil-rate band, and complex interactions with pensions and recent freezes to thresholds have heightened concerns among advisers and tax authorities.

Advisers recommend that families review the size and composition of estates, consider updated tax and pension rules, and seek professional advice to mitigate liabilities where appropriate. Clear communication within families can also reduce uncertainty and the likelihood of disputes after death, advisers say.

Policymakers have not announced changes to the scheduled inclusion of pension pots in estate calculations from 2027 or to the freeze on thresholds, measures that advisers say will be key drivers of how many estates face inheritance tax in coming years. HMRC's recent receipts data suggested the taxman is already collecting larger sums, while industry groups continue to warn that without planning, many households could face unexpected taxation.

The combination of reliance on inheritances, low rates of family discussion, and changing tax treatment highlights a growing planning challenge as wealth passes from baby boomers to Generation X and younger cohorts. Financial and legal advisers say early conversations and up-to-date wills remain central to avoiding unintended fiscal consequences and ensuring estates are distributed according to the wishes of their owners.