Interview with
Martin is a Financial Planner and Director at Amber River HDA, with over 20 years’ experience in the financial services industry – including 14 years as a trusted adviser. He helps individuals and families make sense of the complexities of pensions, investments, and intergenerational wealth planning. He also specialises in working with companies to provide effective Workplace Pension & Protection solutions.
Many people in their 50s, 60s and 70s now find themselves “comfortably wealthy”, often through a combination of rising property values, diligent saving, and inherited wealth.
“Some clients describe it as accidental wealth,” says Martin Johnston of Amber River HDA. “They’ve worked hard, made sensible choices, and benefited from long-term growth. Suddenly they’re looking at a net worth of two or three million pounds, and that brings a whole new set of decisions.”
For others, the shift comes through inheritance. Parents who bought homes in the 1970s and 80s often leave substantial estates, and those assets can feel emotionally charged.
“It’s very common for people to feel reluctant to spend what they see as ‘mum and dad’s hard work’,” says Martin. “My role is to help them honour that legacy by using it well – not by locking it away.”
Above £2 million, planning becomes more pressing. Families begin to lose the Residence Nil Rate Band, and from April 2027, pensions will be brought fully into the estate for Inheritance Tax (IHT) purposes.
The central question, Martin says, is simple but powerful: “How do you enjoy your retirement and protect your family’s future – without giving too much away, too soon?”
Why the £2–£4 million threshold matters
At this level, small decisions can have six-figure consequences.
Once your total wealth passes the £1 million mark, the combination of property, pensions and investments can begin to exceed the main tax-free allowances. These include the IHT Nil-Rate band (£325,000 per person, or £650,00 for a couple) and the Residence Nil-Rate Band (up to £175,000 per person, or £350,000 for a couple, when a main residence is left to direct descendants).
The Residence Nil Rate Band also begins to taper once an estate exceeds £2 million, reducing the total amount that can be passed on tax-free.
From April 2027, pensions will also be included in your estate for IHT purposes, adding another layer of potential exposure. Without active planning, your family could lose a significant portion of your wealth to unnecessary tax.
A typical scenario might involve a married couple in their late 60s with total wealth of around £3 million – perhaps a family home worth about a third of that, pensions making up half, and the remainder in ISAs and investments.
“If they do nothing, their children could lose a substantial amount in IHT, and if those pensions are left untouched after age 75, on death, there may be an additional layer of income tax when their beneficiaries draw on them.”
Spend it, Gift it, Protect against it
Martin summarises Amber River HDA’s approach with a three-part mantra:
“Spend it, gift it, protect against it.”
“It’s about being intentional. The old advice was often ‘spend your pension last’. But that no longer fits. Now we look at what you can safely spend, what you can gift, and how you can protect against tax if life takes an unexpected turn.”
- Spend it: Drawing income earlier from pensions can reduce future IHT exposure, while funding a more enjoyable lifestyle.
- Gift it: Use annual gifting allowances, gifting from excess income, or make larger gifts while ensuring you retain enough for care or longevity.
- Protect against it: Consider insuring against your estate’s tax liability, or gifts made within the seven-year period before they leave your estate.
A typical scenario might look something like this: someone in their early 70s with total assets of around £2.5 million, mainly in pensions and inherited savings, drawing only a modest income to preserve capital.
“In situations like this,” explains Martin, “cashflow modelling often shows that clients can afford to draw a higher income, enjoy a more comfortable lifestyle, and make regular gifts to family while keeping enough aside for the long term.
Managing key risks
As Martin stresses, wealth at this level comes with its own set of risks.
“Longevity, care costs, over-gifting and emotional inertia – those are the big four. The job of a planner is to make sure each is addressed.”
One of Martin’s recent clients was that of an 80-year-old widower, physically healthy but living with dementia, and facing care costs of around £100,000 a year.
“He had £2.5 million, mostly in cash and ISAs, which meant a potential IHT bill of roughly three-quarters of a million pounds. We needed to ensure his care was fully funded, but also start mitigating the estate.”
Martin’s team structured his assets into tranches:
- Cash and short-term savings to cover several years of care and inflation
- Existing Stocks & Shares ISAs
- Gilts for low risk, tax-free growth
- A portion spread across Business Relief providers, offering potential 100% IHT relief after two years
“It struck the right balance between liquidity and mitigation – his care was secure, and his family had clarity and peace of mind.”
Strategies a planner might recommend
Martin is clear that there’s no one-size-fits-all.
“Every plan depends on your income, age, health, and priorities. But at this level of wealth, you have more options – and more to lose if you don’t plan.”
Typical strategies may include:
- Pension strategy: Drawing more now or annuitising part for guaranteed lifetime income.
- Gifting with protection: Making structured gifts alongside short-term insurance to cover potential IHT if death occurs within seven years.
- Regular gifting from income: A powerful, often underused tool for steady estate reduction.
- Trusts: Suitable for larger gifts, though these involve more complexity and potentially reduced control.
- Business Relief investments: Using qualifying investments to remove assets from the estate after two years (with higher risk).
Another of Martin’s clients, a married couple in their early 70s, had sold their business and held significant cash, property and pensions.
“They didn’t need their pensions for income, so we annuitised part of the pot, using the guaranteed income to fund a whole-of-life policy written in trust. That immediately removed the pension from their estate, restored their full Residence Nil-Rate Band, and ensured the life policy remained affordable throughout their lifetime. The proceeds would then be paid to their family, free of IHT, providing a secure and efficient legacy.”
Enjoy today, plan for tomorrow
Martin’s closing message is simple but reassuring.
“This level of wealth offers freedom, but only if you manage it proactively. You can enjoy your retirement, gift confidently, and minimise unnecessary tax – but timing matters. The earlier you plan, the more choices you have.”
With the April 2027 pension reforms approaching, now is the ideal moment to take stock.
“At Amber River, we help clients model different outcomes – spending, gifting, protection – so they can see what’s possible, not just what’s safe.”
Get in touch
Talk to an Amber River adviser near you to model your options and explore how a well-structured plan can protect both your lifestyle and your legacy.
To set up an initial appointment, please call 0800 915 0000, or use our contact form to arrange an appointment.
Disclaimer
The information within this article was correct at the time of publishing, but laws and tax rules are subject to change. Your circumstances and where you live in the UK may also have an impact on your tax treatment.
