M&g Plc · LSE:MNG
M&g — Investor Presentation (August 2025)
58 slides from M&g's investor presentation, August 2025
Slide 1: A case study on the IHT implications of the 2024 Autumn Budget
Tina Pollock A case study on the IHT implications of the 2024 Autumn Budget August 2025
Slide 2: Important information
This content is based on our understanding of current taxation, legislation and HM Revenue & Customs practice all of which are liable to change without notice. The impact of any taxation (and any tax reliefs) depends on individual circumstances. Where content includes case studies or examples thes
Slide 3: Learning objectives
Learning objectives By the end of this session, you will be able to: Assess the impact of Describe the Evaluate different the IHT changes in fundamental options to mitigate a the 2024 Autumn elements of an IHT pension driven IHT Budget on your plan liability clients’ financial planning
Slide 4: Introducing Tina
Introducing Tina • 74-year-old widow - 75th birthday in January 2026. • Husband Ian died 8 years ago at 68 and she inherited everything, including his AIM ISA, on his death. • Lives alone in family home she shared with Ian. • In good health with no known health issues. • Two sons have joint power of
Slide 5: The "Boys"
The “Boys” Roy Bob 43 43 ■ Lives with his partner Kevin (45). No ■ Married to Lyndsay (40) who works in dependents. the family home as a full-time mum ■ Both work for a large IT company and ■ 3 children are financially independent. Rosie (10) and twins Sophie and ■ Roy earns £115,000 a year. Emma (8
Slide 6: Material Information
Material Information Income & Expenditure Met from state pension and drawdown. No foreseeable income or capital needs. Gifting Not gift averse but wants control – boys to “make their own way in the world”. £200,000 of inherited AIM shares to boys 4 years. On condition they paid off chunks of
Slide 7: Objectives
Objectives Priority order Retirement Fund Increase Income Care Legacy (NEED) (NEED) (WANT)
Slide 8: Assets
Assets £760,000 £8,000 £37,000 Home Cash in Bank Premium Bonds Unencumbered 2% interest 0% growth 3% growth Spends winnings £400,000 £480,000 £220,000 Member drawdown Beneficiary Drawdown AIM ISA 6% growth 6% growth 2% growth No income Income £2,200 p.m. No withdrawls 8
Slide 9: IHT liability pre budget
IHT liability pre budget House £760,000 Bank £8,000 Net Estate £1,025,000 Premium Bonds £37,000 AIM ISA £220,000 Add settled property £0 RNRB Taper check! 9
Slide 10: IHT liability pre budget
IHT liability pre budget House £760,000 Bank £8,000 Net Estate £1,025,000 Premium Bonds £37,000 AIM ISA £220,000 Add settled property £0 Less exemptions £0 Less reliefs Business relief 100% - AIM £220,000 £220,000 10
Slide 11: IHT liability pre budget
IHT liability pre budget House £760,000 Bank £8,000 Net Estate £1,025,000 Premium Bonds £37,000 AIM ISA £220,000 Add settled property £0 Less exemptions £0 Less reliefs Business relief 100% - AIM £220,000 £220,000 Main NRB £450,000 Less Nil Rate Bands £800,000 RNRB £350,000 Main NRB reduced by faile
Slide 12: IHT liability pre budget
IHT liability pre budget House £760,000 Bank £8,000 Net Estate £1,025,000 Premium Bonds £37,000 AIM ISA £220,000 Add settled property £0 Less exemptions £0 Less reliefs Business relief 100% - AIM £220,000 £220,000 Main NRB £450,000 Less Nil Rate Bands £800,000 RNRB £350,000 Taxable £5,000 IHT due @
Slide 13: Net legacy
Net legacy August-25 £2,000 £880,000 Net Legacy - £1,903,000 £1,023,000 Net Estate Net Pensions IHT Income Tax 13
Slide 14: Net legacy August 2025 to August 2026
Net Legacy - £1,903,000 Net Legacy - £1,721,416 August-2025 August-2026 Business Relief Reduction Post 75 death income tax (20%) Net Estate Net Pensions IHT Income Tax Net Estate Net Pensions IHT Income Tax 14
Slide 15: Net legacy August 2026 to August 2027
Net Legacy - £1,721,416 Net Legacy - £1,436,471 August-2026 August-2027 Business Relief Reduction Pension included in Estate Loss of RNRB Post 75 death income tax (20%) Net Estate Net Pensions IHT Income Tax Net Estate Net Pensions IHT Income Tax
Slide 16: Apportioning the NRB/RNRB
Apportioning the NRB/RNRB Estate Pension scheme 1 Pension scheme 2 Net estate £1,080,495 Death benefit £484,944 Death benefit £449,440 less Exemptions £0 less Exemptions £0 less Exemptions £0 less Reliefs £114,444 less Reliefs £0 less Reliefs £0 Chargeable £966,051 Chargeable £484,944 Chargeable £44
Slide 17: Apportioning the NRB/RNRB
Apportioning the NRB/RNRB Estate Pension scheme 1 Pension scheme 2 Net estate £1,080,495 Death benefit £484,944 Death benefit £449,440 less Exemptions £0 less Exemptions £0 less Exemptions £0 less Reliefs £114,444 less Reliefs £0 less Reliefs £0 Chargeable £966,051 Chargeable £484,944 Chargeable £44
Slide 18: Paying IHT
Paying IHT Personal Pension Beneficiary Reps Scheme Requests Recovery from IHT “Scheme benefits / own beneficiaries pays” resources Income tax Same Prior to setting refund on IHT beneficiaries? up benefits? amount 18
Slide 19: Net legacy August 2025 to August 2040
Net Legacy - £1,903,000 Net Legacy - £1,926,282 19 August-2025 August-2040 Net Estate Net Pensions IHT Income Tax Net Estate Net Pensions IHT Income Tax
Slide 20: Planning matters
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Slide 21: A 6-step process
A 6 -s t e p p ro c e s s 2 4 6 Model the issue – Identify and exclude Implement and current and future unsuitable options – monitor gift spend relief insure 1 3 5 Establish objectives RAG assets – Choose most suitable (needs & wants) access, needs and from remaining options tax (lifetime & death) –
Slide 22: Step 3 – RAG assets
STEP 3 – RAG a s s e t s Access needs and tax considerations (lifetime & death)
Slide 23: "Ragging" your assets
“Ragging” your assets Expect to be unused and Client’s heirs will have IHT and/or income tax liability Client’s Peace May be required to meet of Mind own needs Expected to be used to Client’s Needs meet needs
Slide 24: Assets
Assets £760,000 £8,000 £37,000 Home Cash in Bank Premium Bonds Unencumbered 2% interest 0% growth 3% growth Spends winnings £400,000 £480,000 £220,000 Member drawdown Beneficiary Drawdown AIM ISA 6% growth 6% growth 2% growth No income Income £2,200 p.m. No withdrawals 24
Slide 25: Taxes everywhere…
Taxes everywhere… Access Tax Death Tax Today Today August 2026 August 2027 Tax Free Pension 0% 0% 20% / 40% 52% / 64% AIM ISA 0% 0% 20% 20% Taxable Pension 20% to 43% 0% 20% / 40% 52% / 64% Residual assets N/A 40% 40% 40% 25
Slide 26: Assets
Assets £760,000 £8,000 £37,000 Home Cash in Bank Premium Bonds Unencumbered 2% interest 0% growth 3% growth Spends winnings £400,000 £480,000 £220,000 Member drawdown Beneficiary Drawdown AIM ISA 6% growth 6% growth 2% growth No income Income £2,200 p.m. No withdrawals 26
Slide 27: Tina's income
Tina’s income Current Source Amount Band Tax Due Beneficiary drawdown £26,400 Exempt £0 Gross £38,363 Beneficiary drawdown £0 State Pension £11,800 PA £0 Expenditure £38,200 Interest £163 SRS £0 Surplus £163 Total £38,363 £0 27
Slide 28: Member's pot – Annuity or Drawdown?
Member’s pot – An n u it y o r D ra w d o w n ? Effective Drawdown Basis Monthly Annual tax rate exhaustion Gross Net Gross Rate % Age No Guarantee £3,258 £2,608 £39,101 9.78% 19.93 89 10 yr Guarantee £3,024 £2,431 £36,282 9.07 19.58 91 15 yr Guarantee £2,790 £2,244 £33,480 8.37 19.54 95 20 yr Guara
Slide 29: Annuitise v Drawdown
Annuitise v D ra w d o w n 74 79 84 89 94 Annuity Probate value £281,764 £243,475 £174,659 £99,123 £0 IHT £112,708 £97,390 £69,878 £39,649 £0 G’tee payments still to be made £617,420 £463,065 £308,710 £154,355 £0 G’tee payments less IHT £504,712 £365,675 £238,832 £114,706 £0 Drawdown Probate Value £
Slide 30: Tina's income
Tina’s income Current Source Amount Band Tax Due Beneficiary drawdown £26,400 Exempt £0 Gross £38,363 Beneficiary drawdown £0 State Pension £11,800 PA £0 Expenditure £38,200 Interest £163 SRS £0 Surplus £163 Total £38,363 £0 Our plan Source Amount Band Tax Due State Pension £11,800 PA £0 Gross £49,6
Slide 31: Assets
Assets £760,000 £8,000 £37,000 Home Cash in Bank Premium Bonds Unencumbered 2% interest 0% growth 3% growth Spends winnings £400,000 £480,000 £220,000 Member drawdown Beneficiary Drawdown AIM ISA 6% growth 6% growth 2% growth No income Income £2,200 p.m. No withdrawals 31
Slide 32: Step 4
STEP 4 Identify and exclude unsuitable options – gift spend relief insure
Slide 33: IHT planning
IHT planning SPEND INSURE RELIEVE GIFT NIL RATE BANDS 33
Slide 34: Tell me when you're going to die
Tell me when you’re g o in g t o d ie a n d I ’l l t e l l yo u w h a t t o b u y!
Slide 35: Average life expectancy years
Average life expectancy 89 years Chance of female aged 74 years living to... e 94 years e923s years 2 100 years 1 in 4 chance 1 in 10 chance 5.0% chance ‘Chance of reaching age (%) 100 89 years Average life expectancy
Slide 36: Insure?
Insure? £1,472 p.m Sum Assured* £450,000 (August 27 liability) “You’ll be 99 before you’ll have paid over £450,000!” 36 *Whole of Life
Slide 37: Insure?
Insure? “You’ll be 99 before “But if you make it you’ll have paid beyond? 85/90 your over £450,000!” legacy will be smaller” £1,472 p.m £1,472 p.m* £264,960* (15 yrs premiums) 85 - £463,770 Sum Assured 90 - £435,549 89 - £568,475 £450,000 91 - £476,371 99 - £995,026 37 *5.1% net growth
Slide 38: IHT planning
IHT planning SPEND INSURE RELIEVE GIFT NIL RATE BANDS 38
Slide 39: Timeline – Reliefs v gifting
Timeline – Re l ie f s v g if t in g Asset IHT based on asset Business becomes being eligible AND Relief relief available. eligible for relief 0 2 3 7 10 years years years years years Gifts leave Non-exempt Non-exempt CLTs may estate gifts become gifts no have No IHT Gift eligible for longer periodi
Slide 40: Business Relief 3% v Loan Trust 5%
Business Relief 3% v Loan Trust 5% £200,000 £180,000 £100,000 invested £160,000 • 20% tax on bond gain • No tax on BR £140,000 • 40% IHT on Loan • 50% IHT relief on BR £120,000 • 100% IHT relief on BR £100,000 £80,000 £60,000 £40,000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 50% Bus Rel 100% Bus Rel
Slide 41: IHT planning
IHT planning SPEND INSURE RELIEVE GIFT NIL RATE BANDS 41
Slide 42: Gifting Regular v Lump Sum
Gifting Regular v Lump Sum £480,000 annuitised, £3,904 p.m, growth: pension 6%, gifts 5.1% £3,500,000.00 £3,000,000.00 £2,500,000.00 £2,000,000.00 £1,500,000.00 £1,000,000.00 £500,000.00 £0.00 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 Drawdown gifting (incl re
Slide 43: Moving money
Moving money REGULAR LUMP SUM ■ More admin ■ Less admin ■ Lower legislative confidence ■ Greater legislative confidence ■ Still got access to future payments ■ Loss of access ■ Ability to redirect ■ Immediate reduction in estate (only for RNRB) ■ Growth on remaining capital will be in your estate ■
Slide 44: Protect v Lump Sum
Protect v Lump Sum £2,000,000.00 £1,800,000.00 £1,600,000.00 £1,400,000.00 £1,207,303 91 £1,200,000.00 £1,000,000.00 £930,182.88 £800,000.00 £600,000.00 £721,203.65 £400,000.00 £200,000.00 £0.00 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 £480,000 annuitised, £3
Slide 45: Step 5
STEP 5 Choose most suitable from remaining options - pros/cons/modelling
Slide 46: Recommendation
Recommendation BENEFICIARY AIM ISA DRAWDOWN (£220,000) (£480,000) Member Onshore Onshore ISA Transfer NEOOI Drawdown Gift Trust Loan Trust £50,000 £4,077 p.a. £37,700 p.a £325,000 £325,000
Slide 47: August 2040
August 2040 Net Legacy - £1,926,282 Net Estate - £1,420,469 No Planning Planning Net Estate Net Pensions IHT Income Tax Net Estate Net Pensions IHT Income Tax
Slide 48: August 2040
August 2040 Net Legacy - £1,926,282 Net Estate - £1,420,469 No Planning Planning Net Estate Net Pensions IHT Income Tax Net Estate Net Pensions IHT Income Tax
Slide 49: Red money moved!
Red money moved! Loan Trust Gift Trust NEOOI £360,368 £670,527 £61,155
Slide 50: August 2040
August 2040 Net Legacy - £1,926,282 Net Legacy - £2,451,364 No Planning Planning Net Estate Net Pensions Net Trust Net Estate Net Pensions IHT Income Tax
Slide 51: Checklist
Checklist Retirement Income Fund Care Increase Legacy Recommendation (NEED) (NEED) (WANT) Member Drawdown ISA Transfer Loan Trust Gift Trust NEOOI
Slide 52: Step 6: Implement & Monitor
STEP 6 Implement & Monitor
Slide 53: Implement & review
Implement & review Loan trust Income Exemption Downsizing management requirements Management Investment Annuitise? ATR/CFL performance Hard / Soft Additional Legislation Care costs gifting? changes facts
Slide 54: Learning objectives
Learning objectives By the end of this session, you will be able to: Assess the impact of Describe the Evaluate different the IHT changes in fundamental options to mitigate a the 2024 Autumn elements of an IHT pension driven IHT Budget on your plan liability clients’ financial planning
Slide 55: Thank you
Thank yo u
Slide 56: Appendix
Appendix
Slide 57: Appendix – Our Plan
Appendix Our Plan Apr 2025 Apr 2026 Apr 2027 Apr 2040 Gross Estate £1,180,000 £1,205,960 £1,232,787 £1,642,163 Inheritance Tax £282,000 £292,384 £347,138 £275,694 Net Estate (excl failed gifts) £898,000 £913,576 £885,649 £1,366,469 Gross Pension £400,000 £386,300 £371,778 £81,119 Income Tax £0 £77,2
Slide 58: Appendix – No Plan
Appendix No Plan Aug 2025 Aug 2026 Aug 2027 Aug 2040 Gross Estate £1,025,000 £1,052,360 £1,080,495 £1,527,913 Inheritance Tax £2,000 £56,064 £185,058 £427,131 Net Estate £1,023,000 £996,296 £895,437 £1,100,782 Gross Pension £880,000 £906,400 £934,384 £1,494,485 Income Tax £0 £181,280 £135,258 £206,3