The firm says the price of the average UK house – £161,746 – takes up 61 per cent of the inheritance tax-free allowance compared with 31 per cent of the band in 1995. This is even higher than at the peak of the property boom in 1989 when the price of the average UK house – £68,754 – represented 58 per cent of the £118,000 band.
Bates points out that the inheritance tax-free band discriminates against households in high-price property areas. The average house in Greater London currently takes up 92 per cent of the band compared with just 38 per cent in Scotland, 46 per cent in Yorkshire and Humberside and 70 per cent in the South-west.
Senior investment adviser Paul Ilott says: “Despite proposals to introduce a series of bands for inheritance tax, if the level at which the tax starts to bite remains unchanged at £263,000 – which is historically when low compared with average property prices – it will remain a tax that discriminates by geography.
Fee-only adviser Independence is offering a no-commission fee-only financial planning service for people born after the baby boomer generation.
Retained Adviser costs £35 a month and offers clients a personalised website and mini financial plan as well as introductions to selected professionals and discount brokers and 1.5 hours face-to-face counsel with the client's own planning team every year.
Independence is keen to work with people from their first or second jobs rather than untangle older generations from “piecemeal purchases” and high-charging financial products. It says if younger people are going to buy a financial product, it should be one with no commission and one that can be used for a long time.
It believes that younger people are more cautious and know they are going to have a harder time than their parents and says the service is an effective alternative to commissionbased money advice.
Independence planner Rob Warren says clients of the service ask questions about whether they can reasonably expect to achieve what they hope their savings will allow them, about their pensions at work, tax codes, the details of joint ownership, mortgages and cashflow.