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Study reveals gender gap in estate planning

Women are less likely to be included in estate planning than men, resulting in potentially poorer decisions in later life, a major study has revealed.

The research, published by the Office for National Statistics (ONS) in collaboration with financial solutions provider Tower Street Finance, suggests that the gender gap is “no more obvious than in estate planning”.

According to the report, more than one in two (53 per cent) women who plan to leave their estate to loved ones have “no financial planning in place” to ensure the plan is executed effectively.

This is compared to two in five (41 per cent) men who say the same.

More than a third (37 per cent) of women also said they did not have any knowledge of Inheritance Tax (IHT) and how it is paid, compared to one in four (25 per cent) men.

IHT is paid at a rate of 40 per cent on the value of an estate above the IHT threshold (currently £325,000, £650,000 if combined with a spouse or civil partner, or £1 million when combined and passing down the family home).

The gender gap study author, Dicky Davies, warned that the issue is particularly significant, as women have higher life expectancies than men, resulting in them more likely being impacted by estate planning and Inheritance Tax.

“We know there is a lack of understanding about IHT – what the thresholds are, who has to pay, when payment is due and what happens if you can’t afford to pay Inheritance Tax,” he said.

“And the reality is that it’s more likely to be an issue for women who, because of higher life expectancies, have greater wealth to leave behind and therefore are more likely to have to pay IHT.”

The ONS analysis is not the first to reveal a gender gap in later life planning. In September, the Manchester Institute for Collaborative Research on Ageing (MICRA) found that men within couples have substantially more private pension wealth than women.

Married men have the most, with those aged 45–54 having a median pension wealth of about £86,000 (compared with £40,000 for women), while those aged 55–64 have £185,000 (compared with £55,800 for women).

Rachel Blackburn, an Associate with Mander Hadley, who specialises in estate planning, said: “The study underlines the importance of seeking good estate planning advice. Regardless of gender or age, putting your financial affairs in order before you die is not something that should be left to chance or put off until another day.

“In fact, the earlier you start, the more opportunities you will have to structure your affairs in the most constructive way.

“The steps you take need to reflect your needs and goals, which will be significantly influenced by your personal circumstances and age.

“At Mander Hadley, we have extensive expertise in estate planning issues, including making a Will, inheritance tax planning and addressing long-term care issues.”

For help and advice with related matters, please get in touch with our later life and estate planning team today.

Mander Hadley

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