The majority of UK homeowners above the inheritance tax (IHT) threshold haven’t calculated their potential liability, new research reveals.
A survey by Censuswide on behalf of Flagstone, also reveals that 20% of estate holders may be underestimating both their wealth and their potential exposure to IHT.
The study of 2,000 UK homeowners aged 45+ found that more than one in five people with estates worth over £1 million say they’re “just getting by” financially.
Meanwhile, 70% of homeowners with estates above the £325,000 IHT threshold have not calculated their potential liability.
The Flagstone survey compared respondents’ perceived financial position with the estimated value of their property, savings, pensions, business equity, life insurance, and possessions.
The research found that while 51% have estates over £500,000 and 13% over £1m, nearly half (47%) still describe their financial position as ‘just getting by’.
The Office for Budget Responsibility’s (OBR) Economic and fiscal outlook recently highlighted how rising house prices and frozen tax thresholds are bringing more estates into scope for IHT.
IHT receipts are forecast to reach £9billion in 2025-26, an 4.6% increase on the previous year, and the OBR projects this will climb to £15 billion by 2030-31.
The Flagstone survey respondents recorded an average estimated estate value of £410,252, and average savings of £38,499.
Nearly 4% of respondents had estates averaging £2.4 million, but only 0.5% of people in the survey identified themselves as ‘very wealthy’.
Respondents who described themselves as ‘financially comfortable’ had an average estate value of £834,078, with average savings of £179,468.
Among those with estates above the £325,000 threshold, the survey revealed that 70% had not calculated their potential liability.
Katie Horne, savings expert at Flagstone, said: “Taking a step back and looking at your estate as a whole can be an important first step, especially when so much of the value is spread across different assets. That can make it difficult to build a clear picture of how much your estate is worth, or how close it may be to the inheritance tax threshold.
“With tax changes coming into effect from April 2027, having a clearer understanding is only going to become more important.
“Simple tools like inheritance tax calculators can help build an initial picture. For those with more complex estates, or where there’s any uncertainty, speaking to a financial adviser can help bring the full picture into focus.”
View the full study here.
