AI demand rises as AJ Bell warns on pension IHT

Artificial intelligence is driving increased demand for financial advice, even as many consumers remain wary of relying on the technology for major retirement decisions. Scottish Widows released its latest Retirement Report on Tuesday, finding that 31% of UK adults would take AI-generated insights to a financial adviser. Another 24% said they would use information from AI tools to have more informed conversations with their pension provider. The research highlights a growing interest in using artificial intelligence to improve financial understanding, though the study also shows that many people still prefer human interaction for complex planning.

Major financial institutions are integrating AI directly into their service platforms. Standard Life launched an AI Coach within its Homebuyer Hub to help customers handle the homebuying process with personalised guidance. The tool provides answers to questions on topics including mortgages, affordability, and deposits, using information from the hub itself. Users can also input details such as their salary or deposit amount to receive more tailored guidance. The insurer stated that the AI Coach forms part of its wider financial wellbeing strategy, helping customers make informed decisions about homeownership while building confidence in their longer-term financial future.

Concerns over pension tax rules

AJ Bell has warned that HM Revenue & Customs’ proposed inheritance tax regime for pensions could unfairly penalise savers. The investment platform argued that the new rules, which bring unused pension assets into the IHT net from 6 April 2027, will deny key tax reliefs available on other assets. According to AJ Bell, executors will be unable to claim loss on sale relief, business property relief, or agricultural property relief on qualifying pension assets. The firm also noted that these specific reliefs remain available for assets held outside pensions, creating what it described as a “two-tier” system.

Executors will not be allowed to pay inheritance tax by instalments on these pension assets, a restriction that contrasts with the treatment of assets held outside the pension wrapper. AJ Bell said the latest technical note from HMRC confirms these specific limitations will apply. The platform has repeatedly called for a review of the proposed changes, arguing that the disparity in treatment undermines the flexibility of pension planning for many savers. The rules are set to come into force next year, prompting increased scrutiny from the investment sector.

While AJ Bell focuses on the tax implications, Standard Life’s move suggests that AI adoption is expanding beyond retirement planning. The integration of AI into the homebuyer hub reflects a broader trend of using automation to handle routine inquiries. This approach allows human advisers to focus on more complex client needs, potentially increasing the efficiency of the advice process. However, the Scottish Widows study suggests that the relationship between AI and advice is complementary rather than competitive. Consumers appear to want the speed and information retrieval of AI tools, but they still seek the validation and oversight of a professional adviser for their most significant life decisions.

Corporate updates

AJ Bell will introduce a new brand identity across its direct-to-consumer and advised businesses starting in September. The refreshed branding includes a new logo, font, and colour palette. The first phase launches on the D2C platform on 5 September. The new identity will be extended to the AJ Bell group website and Investcentre during 2027, while the AJ Bell name will remain unchanged. The rebrand will also feature across the firm’s “Feel Good Investing” campaign and sponsorship of the AJ Bell Great Run series, beginning with the Great North Run in September.