With such a devastatingly high death toll in the UK, it’s perhaps no surprise that the COVID-19 pandemic means more people thinking about writing their will.
Drewberry’s 2021 Pandemic Health & Protection Survey of 1,000 working adults found 30.3% of Brits either agreed or strongly agreed with the statement that they’re more likely to consider a will today than before the pandemic.
However, 46% of adults feel no different towards making a will. This suggests there’s still more to do to persuade Brits to get their affairs in order.
It’s also worth noting that, while we associate writing wills with preparing in case the worst happens, a smaller proportion of adults said they either agreed or strongly agreed that they were more likely to buy Life Insurance since the pandemic.
Just 17.5% of Brits agreed that they were more likely to buy Life Insurance now than before COVID-19 struck.
While many consider wills as ‘for older people’, our survey shows that younger adults are now actually more likely to consider writing one than the general population. This could simply be because many older adults already have a will.
However, it remains that more than 2 in 5 (43.1%) of adults aged 25-35 either agreed or strongly agreed that they are more likely to think about a will now than they were before the pandemic. This rose to 62.1% of adults aged 35-45.
A will is an important legal document. It states who your money and possessions — your estate — should pass to when you pass away. However, according to insurer Canada Life, 59% of UK adults don’t have one.
Without a will, the state dictates who can inherit your estate under the rules of intestacy. They differ depending on whether you’re in England and Wales, Scotland or Northern Ireland, but they’re rarely what you’d prefer.
For example, in England and Wales, if you’re married / in a civil partnership with children and die without a will, the rules dictate that:
More than 5 million people in England and Wales live with their partner but aren’t married or in a civil partnership. This becomes a problem if you pass away without a will.
Even if you live together, there’s no such thing as ‘common law partners’, as many assume. Intestacy doesn’t automatically entitle your partner to anything unless you are married to them or in a civil partnership.
Not only could it cause financial difficulties for your family if you die without a will, but it makes it difficult to mitigate the impact of inheritance tax.
This is perhaps most obvious where the government has tweaked inheritance tax thresholds over the years.
HMRC charges inheritance tax at 40% on every estate worth more than £325,000. This threshold is known as the nil-rate band. It represents how much you can leave before paying inheritance tax.
However, you can transfer up to 100% of your nil-rate band to your spouse / civil partner when you die. That gives your partner a nil-rate band of up to £650,000 to leave to loved ones before they must pay inheritance tax on their death.
The government introduced the residence nil-rate band at the start of the 2017/18 tax year. This currently stands at £175,000. You can also pass up to 100% of this to your spouse / civil partner on death, for a total residence nil-rate band of £350,000.
Combined with the nil-rate band, this gives married couples an effective threshold of up to £1 million before any inheritance tax is due.
If you have children, to transfer the full 100% of your nil-rate band and residence nil-rate bands to your partner, you must leave a will stating your wishes. This is because intestacy only pays your spouse / civil partner the first £270,000.
If your affairs are relatively simple, and there are no issues such as complex family structures or the need for trusts or inheritance tax planning, you can use Farewill to write your own will online. We’ve reviewed Farewill’s will writing service here.
Drewberry also partners with Farewill — click here for a 15% discount off your will at the checkout ⟶
However, while Farewill is cheaper than a solicitor, it does not provide legal or tax advice and cannot help with inheritance tax planning. It’s also only available to residents of England and Wales.
If you have more complex needs, for whatever reason, it’s worth speaking to an expert instead.
Writing a will is so important to keep any sort of control over who gets what when you pass away.
We offer an inheritance tax planning service and partner with private client solicitors to help you plan your affairs. For help and advice, just pop us a call on 02084327333.
Head of Financial Planning at Drewberry
I’ve held a policy with Drewberry for several years now. They are always friendly, insightful and offer great service.