Millions of well-intentioned people in the UK are helping their loved ones manage their online financial accounts, but could risk having these accounts frozen because they don’t have a Lasting Power of Attorney (LPA) in place. 

Lloyds’s 2024 Consumer Digital Index (3 November 2025) suggests 1 in 5 adults – the equivalent of 11 million people – are helping others handle financial accounts online. Among the most common tasks were making payments, checking balance information and statements, and paying in cheques. 

Logging into a family member’s bank account to pay essential bills might seem harmless, but it could be risky if an LPA isn’t in place. Indeed, assets may be frozen, and it could lead to disputes in the future. 

The Lloyds report indicates that only 21% of people supporting loved ones with their digital finances have a formal agreement, such as an LPA. 

Please note: The Financial Conduct Authority does not regulate Power of Attorney. 

A Lasting Power of Attorney allows someone you trust to make decisions on your behalf

An LPA gives someone you trust the ability to make decisions on your behalf if you lose mental capacity. There are two types of LPA:

1. Health and welfare, which covers decisions around areas like daily routine, medical care, moving into a care home, and life-sustaining treatment. This LPA can only be used if you’re unable to make your decisions.

2. Property and financial affairs, which allows an attorney to take actions such as managing a bank account, paying bills, collecting benefits or a pension, or selling property. This LPA may be used as soon as it’s registered if permission is granted. 

It’s important to note that no one has an automatic right to make decisions on your behalf, including your spouse or civil partner. 

If someone could benefit from your support now or in the future, encouraging them to create an LPA could be important. It may allow you to make essential decisions on their behalf or manage their affairs when they’re in a vulnerable position.

The paperwork for an LPA cannot be signed once the person has lost mental capacity. 

An  LPA might not be appropriate for everyone or immediately, but considering your options early might provide you with more time to make informed decisions, including thinking about who you’d appoint as an attorney. 

Without a Lasting Power of Attorney, you’d need to go through the Court of Protection 

If a loved one has not created an LPA and loses mental capacity, you’d need to apply to the Court of Protection to be appointed as a deputy. Often, this process is slower and more costly than using an LPA. 

As a result, it could leave your loved one in a position where they cannot make decisions themselves, and no one can do so on their behalf. This could lead to important medical decisions being delayed or financial affairs not being addressed, which might have long-term consequences. 

What’s more, there’s no guarantee that the court would appoint the deputy that the individual would have chosen for themselves. 

Considering your own Lasting Power of Attorney 

As you help a loved one set up an LPA, it may be a good time to review your own arrangements. 

You can make an LPA online or using paper forms, which must then be registered with the Office of the Public Guardian. In most cases, you’ll need to pay a £92 application fee to register each LPA. 

Think carefully about who you’d like to make decisions on your behalf, and who would be comfortable with the responsibility. Choosing an attorney is an important decision, as they may have significant authority over financial or healthcare matters

You may choose more than one attorney and state whether they must make decisions together or if they can do so independently.

Scheduling time to talk to your attorneys could be useful, providing you with a chance to be clear about your wishes. Your attorney might need to make decisions about the type of treatment you receive if you’re ill or whether to sell your property if you move into care, and they may benefit from guidance from you.

While it might feel morbid to consider losing mental capacity, it could ensure your loved ones are able to support you when you need it most. 

Get in touch

If you have questions about your estate plan or that of a loved one, including a Lasting Power of Attorney, we could help. Please contact us to arrange a meeting with one of our team. 

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The Financial Conduct Authority does not regulate Power of Attorney. 

Inheritance Tax (IHT) is a growing concern for many people in the UK, with increasing numbers of estates facing a rising tax liability.

Each year, the amount of IHT paid to HMRC is increasing. By 2030/31, the Office for Budget Responsibility (February 2026) forecasts that IHT receipts will reach £14.5 billion, up from £8.3 billion in 2024/25.

Frozen tax-efficient allowances are a key driver behind this trend. As your estate grows, a larger portion could exceed the threshold and become subject to IHT.

What’s more, once your estate reaches £2 million, your tax-efficient allowance can start to reduce, exposing more of your wealth to IHT.

Read on to learn how the value of your estate could affect the amount you can leave behind tax-efficiently.

The nil-rate bands allow you to pass on some assets tax-free

Your IHT allowances are known as “nil-rate bands”.

As of 2026/27, the nil-rate band is £325,000. This is the amount you can leave behind when you die without the value being included in IHT calculations. The portion of your estate exceeding the nil-rate band is usually taxed at 40%.

You may also have a residence nil-rate band if you leave a primary residence to a direct descendant. This can be up to £175,000, as of 2026/27, bringing your potential tax-efficient allowance to £500,000.

If you’re married or in a civil partnership, the spousal exemption usually allows partners to leave assets to one another tax-free. Any unused nil-rate band typically transfers to the surviving spouse, potentially allowing couples to pass on up to £1 million tax-efficiently.

The nil-rate bands are expected to remain frozen until at least 2031, meaning a larger portion of your estate could be taxable than if the thresholds had risen with inflation.

You could start to lose your residence nil-rate band when your estate exceeds £2 million

The residence nil-rate band usually begins tapering once the value of your total estate reaches £2 million.

For every £2 your estate exceeds the threshold, you lose £1 of your residence nil-rate band. So, if your estate were £100,000 over the threshold, your allowance would reduce by £50,000.

The taper continues until your estate reaches £2.35 million, at which point you lose your full residence nil-rate band. This can mean an additional £175,000 of your estate could be subject to 40% tax, potentially increasing your IHT bill by £70,000. For a couple losing the full allowance, the IHT bill could rise by £140,000.

While married and civilly partnered couples can typically transfer unused nil-rate bands to potentially double their tax-efficient allowance, the taper threshold remains fixed at £2 million. In some cases, if assets are transferred to a surviving spouse, their total estate could exceed the threshold, and they could lose both partners’ residence nil-rate bands.

More estates are passing the threshold

MoneyWeek (February 2026) reports that the number of estates valued at over £2 million could rise from 3,620 in 2023 to 16,000 by 2030/31.

The level at which the residence nil-rate band begins to taper is set to remain frozen at £2 million until at least 2031, having not changed since it was introduced in 2017.

According to the Bank of England’s (April 2026) inflation calculator, the threshold would have risen to over £2.7 million if it had grown with inflation since 2017.

As earnings rise and asset values increase with inflation, more estates could pass the £2 million threshold and start losing their tax-efficient allowance.

In particular, rising property prices are pushing up the total net value of many estates. With the threshold frozen, it’s important to consider how the value of your assets might grow over the long term when planning to pass them on tax-efficiently.

What’s more, from April 2027, your unused pension pots could be included in your estate for IHT purposes when you pass away. Depending on how much is left in your pension when you die, this could add a significant amount to your estate’s net value, potentially pushing your total over the £2 million threshold.

3 ways to potentially mitigate an Inheritance Tax bill

If you’re worried about your estate exceeding the taper threshold and losing your nil-rate band, you might consider taking proactive steps to mitigate your estate’s IHT liability.

1. Give gifts in your lifetime

Gifting wealth in your lifetime could be an effective way to reduce the value of your estate. Gifts that do not qualify for an exemption may be included in your estate for up to seven years after they were given. If you die within seven years, the value could be subject to IHT. 

However, when it comes to determining whether you have exceeded the £2 million taper threshold, only assets you owned at the time of death are usually included in calculations. Therefore, gifts made within the seven years prior to death typically do not count towards the threshold. 

So, by gifting your wealth, you may reduce the likelihood of losing your residence nil-rate band, while reducing the size of your estate being taxed.

That said, it’s important to ensure gifts are affordable and will not impact your current financial wellbeing or long-term financial goals. A financial planner can support you in incorporating tax-efficient gifting into your wider financial plan.

2. Leave a charitable legacy

If you leave 10% or more of your net estate to charity when you die, your IHT rate could reduce from 40% to 36%. In addition, gifts left to charities when you pass away are not included in IHT calculations. Depending on your circumstances, it could be an effective strategy to reduce your IHT bill while supporting a cause close to your heart.

Additionally, giving to charity during your lifetime can help reduce the size of your estate to mitigate an IHT bill and prevent your residence nil-rate band from being reduced.

3. Place assets in trust

You may be able to mitigate an IHT bill by putting assets in a trust.

Assets held in a trust may still be liable for IHT, depending on the type of trust used and when you pass away. However, typically, the value will not be considered when calculating whether your estate exceeds the £2 million threshold for losing your residence nil-rate band.

The rules for placing assets in trust and the IHT implications can be complex and vary between different trust types. Usually, you will be unable to remove assets from a trust once you have transferred them in. So, it’s important to seek legal and financial advice before making any irreversible decisions.

Get in touch for estate planning support

If you’re worried about your estate’s IHT liability, get in touch to find out how we can support you to pass on wealth tax-efficiently.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, tax planning, Inheritance Tax planning, or trusts.

The 2026/27 tax year started on 6 April 2026. While you have until 5 April 2027 to use tax-efficient allowances and exemptions, making a plan now could be valuable. 

Here are four powerful reasons to consider your tax strategy for the current tax year. 

Avoid last-minute stress as the end of the tax year approaches 

Using tax year allowances and exemptions is often associated with the end of a tax year.

However, leaving decisions until the last minute could mean it’s more stressful than it needs to be, and you might make a rushed decision that isn’t right for you. In addition, delays could occur, which means you miss the 5 April 2027 deadline. 

Instead, using the start of the year to review decisions means you have plenty of time to assess what’s right for you. 

Potentially benefit from an additional year of interest or growth 

If you have a lump sum to save or invest, using allowances early in the tax year means you could potentially benefit from additional months of interest or returns. When you consider the effect of compounding, you could be better off using some of your allowances now.

One option to consider is your ISA annual subscription limit. In 2026/27, you can place up to £20,000 into ISAs. You can choose to save or invest in an ISA to suit your goals. 

Adding a lump sum to ISAs at the start of the tax year or drip-feeding contributions over the months could yield better results than waiting until April 2027, particularly when you factor in compounding.

Similarly, the pension Annual Allowance is £60,000 or 100% of your annual income, whichever is lower, in 2026/27. This is the amount you can add to your pension this tax year while retaining tax relief.

Your pension is usually invested. Depositing a sum now could mean your additional contribution has a longer period to potentially deliver returns and boost your retirement savings. 

Remember that all investments carry some risk, and it’s important to understand what level is appropriate for you. Investment returns are not guaranteed, and you could lose money. 

Create a strategy for disposing of assets

If you plan to dispose of assets, you might need to pay Capital Gains Tax (CGT) if you make a profit. 

The Annual Exempt Amount means you can make up to £3,000 in gains in 2026/27 before tax may be due. Reviewing your options now could allow you to create an effective strategy for disposing of assets.

For example, if you have several assets to dispose of, you might spread the sale of them across the current and next tax years to use the Annual Exempt Amount for both years. Alternatively, you can pass on assets to your spouse or civil partner tax-free, which may allow you to use both your allowances. 

Setting a plan early in the tax year means you have time to consider your tax position and goals, and adjust your plan if necessary. 

Plan whether to gift assets this year

Over the course of the year, you might want to gift assets to loved ones. This could support beneficiaries and also make sense from an Inheritance Tax (IHT) perspective. 

In 2026/27, the nil-rate band is £325,000. This is the amount you can pass on when you die before your estate might become liable for IHT. Fortunately, there are ways to mitigate a potential IHT bill, including passing on your assets during your lifetime.

Not all gifts are immediately outside of your estate when calculating IHT. Some gifts may be included in your estate for up to seven years, so making use of these allowances might be an important IHT strategy. 

In 2026/27, gifting allowances include:

• Up to £3,000 to one or more people, known as the “annual exemption”, which you can carry forward for one tax year

• Up to £250 per person, so long as another allowance has not been used on them

• Gifts for a wedding or civil partnership of £5,000 for your child, £2,500 for your grandchild or great-grandchild, and £1,000 for anyone else

• Regular gifts that come from your income. There is no limit on how much you can give, but you must be able to maintain your usual living costs after making the gift. 

Reviewing your plans now means you can make them part of your budget and overall plan. It could also allow you to identify effective ways to support your family and friends. 

Get in touch

Your financial circumstances and goals will affect which allowances and exemptions are appropriate for you. If you’d like to discuss how you might improve your tax efficiency in 2026/27 and work with us to create a tailored plan, please get in touch. 

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The Financial Conduct Authority does not regulate tax planning, Inheritance Tax planning or estate planning. 

If you’re planning to take a career break, being proactive could help you keep your pension and long-term plans on track. 

Many people taking a career break will consider the effect on their short-term finances, such as how they’ll pay essential bills and if they’ll need to dip into savings. However, they may not consider the potential long-term implications of pausing pension contributions. 

A two-year career break could mean your pension is thousands of pounds less

According to figures published in the i Paper (4 March 2026), a 27-year-old with a £9,000 pension pot contributing £200 a month who takes a two-year break at age 30 would see their projected retirement pot shrink from £199,130 to £188,727 – a difference of more than £10,400. 

One of the most common reasons to take a career break is for maternity leave. Indeed, Scottish Widows states that the biggest driver of the gender pension gap remaining “stubbornly wide” is career breaks. Around half of women have taken a career break at some point, compared to 1 in 5 men. 

Of course, there are other reasons to take a career break. You might have caring responsibilities for elderly relatives, further your education, or simply take a break.

Whatever your reasons for taking a career break, there might be some steps you could take to keep your retirement on track. 

5 practical tips that could support your long-term finances during a career break 

1. Assess the potential impact 

Don’t bury your head in the sand when you’re taking a career break. Instead, work out what you expect the financial impact to be before you stop working.

It might feel like a daunting task, but knowing where you stand could help you feel more in control. Armed with this information, you can create a plan to mitigate the implications of a career break and boost your confidence about the future. You might even find that you’re in a better position than you expect, and your pension will remain on track without any adjustments. 

2. Consider your National Insurance record

For many people, the State Pension plays an important role in their retirement finances, as it provides a reliable income.

The amount you’re entitled to when you reach State Pension Age is linked to your National Insurance (NI) record. Usually, you’ll need 35 qualifying years on your record to receive the full State Pension. If you take a career break, you could be left with a gap.

In some cases, you may be able to claim NI credits to fill these gaps. For example, if you receive Child Benefit for a child under 12 or are a carer for a disabled person, you might receive NI credits. 

Depending on your circumstances and plans, a career break might not harm your State Pension entitlement either. If you started working full-time at 20 and plan to retire at 65, you’d have 45 years on your NI record. So, even if you took a break for a few years, you’d still have the required 35 years to receive the full amount.

You can check your NI record online to understand if a career break might affect your State Pension income. 

3. Continue to make pension contributions during a career break

Taking a career break doesn’t mean you have to stop pension contributions. If you’re in a financial position to do so, you could make one-off or regular contributions into your pension, which would benefit from tax relief.

One thing to note is that the limit for receiving tax relief on your pension contributions as a non-taxpayer in 2026/27 is £2,880. If you deposit the full amount, it will attract tax relief of £720. 

However, it is possible to carry forward unused pension Annual Allowance from the previous three tax years if you’ve exhausted this year’s allowance, which might allow you to make higher contributions tax-efficiently.

4. Make pension contributions from your partner’s salary 

If you’re taking a career break while your partner continues to work, for example, as the primary caregiver to young children, they could make contributions to your pension alongside their own.

This option could ensure both you and your partner’s pensions continue to grow to keep your shared retirement on track. 

5. Make higher pension contributions when you return to work

Being aware of a potential pension gap before you take a career break could allow you to create a long-term plan. To make up for a shortfall, you might be able to increase your pension contributions when you return to work.

We could help you assess the impact of a career break

Whether you’ve taken a career break or are planning one in the future, we could work with you to understand how it might affect your pension. By being proactive, you could keep your retirement plans on track and feel confident about your finances. 

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.