Advisers say choosing a tax wrapper has become harder

Research commissioned by AJ Bell and conducted by Ad Lucem surveyed 350 UK financial advisers and 150 paraplanners online in May 2026. 88% of the advisers said tax wrapper decisions had become more complex over the past three years. 86% of the paraplanners said the same. 79% of the advisers said they would use a formal wrapper decision framework if one existed.

7 min read · Altro Partners, by Equity & General

88%

of the UK financial advisers surveyed said tax wrapper decisions had become more complex over the past three years

AJ Bell research conducted by Ad Lucem, May 2026

Reacting to

Advisers call for ‘wrapper reset’ as tax changes complicate planning (Money Marketing, 18 August 2026)

Those are specialists who choose between pensions, ISAs, trusts and onshore and offshore bonds every week, with technical teams and provider support behind them. A company owner makes the same decision once a year, at the year end, with the company accounts in front of them and no adviser in the room. The FCA's Financial Lives 2024 survey found that 8.6% of UK adults had taken regulated financial advice in the previous twelve months, and 13% of the self-employed.

What the research says has changed

The research attributes the added complexity to three things.

Reductions in several tax-free allowances.
Increases in capital gains and dividend tax rates.
And unused pension funds coming into the estate for inheritance tax from 6 April 2027 (Finance Act 2026), which changes the order in which owner-managers have been advised to draw on their assets.

Charlene Young, head of technical at AJ Bell, said advisers were having to reconsider established approaches to how clients draw income from and pass on their wealth, and that the level of agreement showed “this reset is something the entire industry must recognise”. Tony Wickenden of Technical Connection, who worked on the accompanying material, described it as running across accumulation, decumulation, preservation and transfer.

Each of those four stages shows up in the accounts. Accumulation is retained profit and the extraction policy. Decumulation is the owner asking what the company can pay them. Preservation and transfer are the shareholdings, the trusts and the succession conversation.

What the accountant sees

Illustration, using a made-up company. A trading company has £180,000 in the current account, of which £60,000 is committed to working capital and tax. The owner is 54. There are two old workplace pensions from before they went out on their own, untouched since. Extraction has run on the same salary-and-dividend pattern for six years. A director's loan is cleared and re-drawn each year.

Nothing in that file is a problem on its own, and every one of the changes the research identifies runs through it: the dividend rate on the extraction, the capital gains position if the business is sold, and from April 2027 the inheritance tax treatment of the two dormant pensions. The accountant can see all four facts at once.

Where the accountant's work ends

The tax analysis is accountancy work. Working out how much of the £180,000 is surplus, what a given extraction route costs, the corporation tax treatment of an employer pension contribution, and what a disposal would do to the client's marginal position are all things the client already pays you for.

The selection is regulated advice. Recommending that this client's money belongs in a pension or an ISA, or in a bond or a general investment account, needs FCA authorisation, and the authorised firm carries the liability if the recommendation is tested years later.

The sequence is: tax facts first, from the person who holds them; the wrapper decision second, by the Equity & General financial planner. Surplus cash is covered in the cash question.

What is not yet settled

The secondary legislation and guidance for the April 2027 inheritance tax treatment of unused pension funds are still to be published, so the administration around it is not final. Describe the direction to a client and leave the calculation to the financial planner once the detail is in place.

Whether a decision framework of the kind 79% of advisers said they wanted changes how wrapper decisions are made is unknown. AJ Bell has published one alongside the research and is running a ten-location tour between 7 and 22 September 2026 to take advisers through it. A survey conducted in May cannot show its effect.

Neither uncertainty changes the position for an accountant. The client with no adviser is not putting the decision in front of a specialist at all. The advice gap sets out the size of that group.

Common questions

Can an accountant advise on wrapper choice?

The tax analysis is accountancy work: how a company distribution is taxed, what a disposal does to a client's marginal position, how a pension contribution interacts with corporation tax. The recommendation is regulated: telling a client that a particular pension, ISA, bond or trust is the right home for their money is advice under the Financial Services and Markets Act and needs FCA authorisation. The accountant describes the tax consequences of the options. The financial planner decides which option suits the client.

Why does an adviser's difficulty matter to a client with no adviser?

The AJ Bell research surveyed people who choose wrappers for a living, with technical teams behind them, and 88% of the advisers and 86% of the paraplanners said the decision had become harder over three years. A company owner making the same decision once, at the end of a busy year, has none of that support. The FCA's Financial Lives 2024 survey found that 8.6% of UK adults had taken regulated financial advice in the previous twelve months, and 13% of the self-employed.

What changes in April 2027, and is it too early to raise it?

For deaths on or after 6 April 2027 most unused pension funds and death benefits count in the estate for inheritance tax (Finance Act 2026). The AJ Bell research names that change as one of the drivers of harder wrapper decisions. A pension built up on the understanding that it would pass outside the estate is now a different asset in planning terms, and the owners most affected are those who left pensions untouched while drawing dividends. Raising it at the 2026 year-end meeting gives the client time to take advice before the date. When the pension joins the estate covers the change in detail.

A client asked whether spare company cash should go into a pension or an ISA. What can we say?

You can state the facts. How much of the balance is surplus once working capital, tax reserves and known commitments are set aside is your analysis. So is the corporation tax treatment of an employer pension contribution, and the cost of extracting the money as salary or dividend first. The comparison between wrappers, given the client's age, attitude to risk, retirement date and existing holdings, is regulated advice. You supply the surplus figure and the tax picture. The financial planner makes the selection.

How do the accountant and the financial planner work on this together?

From one set of facts. The accountant brings the surplus cash figure, the director's loan, the extraction pattern, the shareholdings and the owner's age. The financial planner brings the regulated analysis and the recommendation. The tax facts are established first and the wrapper decision is made second, by someone authorised to make it. In an Altro partnership the introduction is made through the portal, in your firm's name, and your firm sees each step from first call to advice in place.