6 minute read
When you think about your legacy, it usually comes down to what you leave behind. A house, a pension, or perhaps a personal item which holds value, such as jewellery.
In reality, it is not just what you leave behind. A legacy also reflects how you use your wealth during your lifetime, the support you provide to family, and the impact you have through the causes that matter to you.
Legacy planning is the process of deciding how your assets, values and intentions come together, and how they are passed on over time. Many of these decisions are made during retirement, when you are actively deciding how to draw income, spend, and provide financial support to family.
This matters because of the scale of wealth transfer underway between generations. Inheritance tax is forecast to raise around £8.7 billion in 2025–26, according to data from the Office for Budget Responsibility, though forecasts are subject to revision.
Retirement is often the point where legacy stops being theoretical and becomes practical, shaped by the financial decisions you make during this important phase of your life.
What is legacy planning and what does it mean for you?
There is no single definition, and that is what makes it so personal.
The truth is that legacy planning is not just about money, it can also be about the impact you want to have beyond your own lifetime. For some, legacy planning is about family security, helping children onto the property ladder, supporting grandchildren through education, or creating a financial safety net for loved ones.
For others, it is about passing on values. This might include attitudes to money, the importance of planning ahead, or a desire to support causes beyond the family. These non-financial elements can shape how wealth is used and understood across generations.
Charitable giving is also playing a growing role in how people think about legacy. According to the Charities Aid Foundation, £15.4 billion was donated to charity in the UK in 2024, with fewer people giving than previously, but those who did often contributed larger amounts.
This reflects a broader shift. Legacy is increasingly shaped during retirement through ongoing decisions about giving, rather than being determined only at the end of life.
When should you start legacy planning?
It is easy to assume that legacy planning is something to think about later in life. In reality, starting earlier can give you more flexibility and control over how your wishes can be executed.
A 65 year old in the UK can expect to live for a further 18 to 21 years on average, according to the Office for National Statistics. That means your retirement could last two decades or more, giving you time to adjust your plans rather than making more reactive decisions later on.
Despite this, timing is often overlooked. Research suggests that many people regret leaving general financial decisions too late, with missed allowances and last-minute planning among the most common outcomes. In legacy planning, the consequences of delay can be even more significant.
How to balance retirement spending with leaving a legacy
One of the most common challenges is balancing your own lifestyle with the desire to support others.
In practice, this balance is shaped through frequent decisions made during retirement. How much you withdraw from your pension, whether you use savings or preserve them, and when you choose to provide financial support can all have a direct impact on your long-term position.
Research from the Institute for Fiscal Studies shows that inheritances are often received later in life, frequently when recipients are already in their 50s or 60s.
This creates an important contrast. Financial support given earlier, during your retirement, may have a more immediate and practical impact than wealth passed on after your death.
At the same time, pension wealth now forms a significant share of overall household wealth in the UK. This makes decisions about how and when to access it particularly important.
The way you use your pension and other assets during retirement can influence both your financial security and the legacy you leave behind.
It is also worth noting that from April 2027, unused pension funds will generally form part of your estate for inheritance tax purposes — a significant change that makes early planning particularly important.
A checklist: Questions to ask when planning your legacy
- What does a comfortable retirement look like for you in real terms?
- How much flexibility do you have to support your family during your lifetime?
- When might financial support make the biggest difference to your children or grandchildren?
- How do you balance gifting with maintaining your own financial security?
- Should charitable giving play a role in your plans?
- How could tax affect what you pass on over time?
- How do your pension and other assets fit together within your overall plan?
How financial advice can support your legacy planning
Turning ideas about legacy into a clear plan often means looking at your finances in one place. An adviser can help you see how your pension, investments, property and savings fit together, and how different choices in retirement may affect both your income and what you leave behind.
In practice, retirement and legacy planning are closely linked. How you draw income, the order in which you use different assets, and the timing of any gifts can all shape the outcome.
If you would like to explore how your retirement choices could shape what you leave behind, speaking to one of our independent advisers can help bring that into focus. You can arrange a free, no-obligation meeting at a time to suit you here: https://fcadvice.co.uk/book-an-appointment/
Please note:
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term (minimum of 5 years) and should fit in with your overall risk profile and financial circumstances.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The Financial Conduct Authority does not regulate estate planning, tax planning, trusts, or Will writing. Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.
Planning horizons are illustrative and will vary based on individual health, circumstances, and life expectancy.