Analysis from Equiniti Benefactor – the bereavement services business of Equiniti finds that over £17 billion in cash is left behind after deaths in the UK each year, an average of £69,000 per estate.

Stuart Simpson, head of Equiniti Benefactor, believes the figures demonstrate how crucial end of life-planning is for people approaching later-life, commenting: “For estates to be holding nearly £70,000 in cash at the point of death raises questions about how people are handling their finances in later life. Even through the process of probate, this wealth will be eroded through inflation, while a pot of money held in cash throughout retirement will suffer more serious problems.”

Recent figures by HMRC, show that property continues to dominate the value of assets at bereavement accounting for 54% of the total wealth – over £43 billion worth of residential housing.

Equiniti’s Simpson adds: “The HMRC figures show that around a third of estates that include a property now break the inheritance tax threshold, demonstrating that estate planning should be a key part of our financial lives. Inheritance tax (IHT) can be a nasty shock for those who are not aware of their limits and the fees their loves ones may incur on wealth that is being passed back down to family and friends. We would encourage all those entering their later-lives to see a professional financial adviser who can help maximise whatever inheritance they wish to leave behind and ensure peace of mind.”

“IHT can be a nasty shock for those who are not aware of their limits and the fees their loves ones may incur on wealth that is being passed back down to family and friends.”

Start planning early

Anyone who looks likely to be liable to pay inheritance tax should start planning as early as possible to avoid any nasty surprises.

According to Laura Suter, personal finance analyst at AJ Bell, IHT is a “notoriously tricky tax to navigate and understand”.

Suter says in an FT Adviser article: “The seven-year taper means that anyone who wants to gift money benefits from doing so sooner rather than later, and potentially avoiding paying IHT if they die within seven years of making the gift.

“That said, with the rising cost of care, people need to ensure that they aren’t giving away money that they may potentially need later in life.

“While it is nice to be able to leave a nest egg for your children, family or friends, you do not want to do it at the expense of your own future.”