Frozen tax thresholds and rising property values are reshaping what clients need from their broker
A growing number of homeowners are finding themselves asset-rich but cash-poor, and the protection industry has yet to fully catch up.
Gerard Boon (pictured top), managing director of Boon Brokers, argues that the traditional protection conversation — centred on covering the outstanding mortgage debt — no longer reflects the financial reality facing many clients. Decades of property price growth, combined with inheritance tax (IHT) thresholds that have remained frozen since 2009, have quietly drawn ordinary homeowners into IHT territory.
The main nil-rate band has stood at £325,000 for over 15 years. Over that period, fiscal drag has transformed IHT from a liability associated with large estates into a mainstream concern for families who bought conventional homes and have seen their paper equity grow substantially. Yet in a slower property market, where sales can take months and valuations face greater scrutiny, that equity is increasingly difficult to access quickly.
"Clients are no longer just asking how to protect their borrowing anymore, they are asking how to protect the wealth they've spent decades building," Boon said.
When a client dies holding a property-heavy estate, their family faces a strict six-month window from HMRC in which to settle the tax bill, while simultaneously trying to sell an illiquid asset in a market that may not move quickly. The resulting pressure can force families into a choice between accepting a below-market sale price or taking on expensive short-term borrowing before probate is granted.
"More homeowners are realising that while their property value is high, their family could end up cash-poor when HMRC comes calling," Boon said. "For many, this creates a very real, property-rich, cash-poor reality."
He points to whole-of-life policies as the appropriate tool for this scenario. Unlike term cover structured around a fixed mortgage period, a whole-of-life policy guarantees a payout whenever death occurs, providing liquidity precisely when it is needed.
However, he cautions that the policy's value depends entirely on how it is set up. "Without a trust in place, the insurance payout drops straight into the deceased's estate," Boon said. "The result can lead to two massive headaches: first, it gets taxed, boosting the total value of the estate and increasing the very tax bill you were trying to solve. Second, it gets stuck behind the administrative wall of probate, defeating the entire purpose of having quick cash to pay HMRC within that six-month window.
"In reality, putting the policy into trust takes 10 minutes of paperwork, but can completely change the outcome. The money sits neatly outside the estate, HMRC can't touch it, and the beneficiaries get access to tax-free cash in weeks rather than months. It can be an open-and-shut win, yet is still overlooked far too often in our industry."
Boon also raises a competitive dimension. Brokers who do not begin incorporating IHT planning and trust advice into their client conversations risk ceding that ground to financial planners, wealth managers, or other advisers who will. "If we don't start having these elevated conversations about whole-of-life, IHT, and trusts — someone else will," he said.
He argues that the scope of protection advice has fundamentally shifted. "Protection has always been about taking stress away from families during their hardest moments," Boon said.
"But more than ever in today's troubling market, taking that stress away has evolved into ensuring our advice doesn't just cover the roof over a family's head, but protects the wealth they hope to leave behind."
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