The seven steps rich households are taking next year to maximise their cash… and why you should too, no matter your wealth, revealed by top financial experts

When it comes to tax-efficient financial planning, it can pay to pay attention to what the very wealthy are doing.

Those with complex tax affairs and financial advisors know how to maximize tax deductions and take advantage of valuable loopholes.

These strategies will become even more important next year as new taxes are introduced, existing allowances are reduced and a growing number of taxpayers see their bills increase due to frozen thresholds. Millions of people will see the amount they take home decrease each month unless they take action.

Alex Pugh, chartered financial planner at wealth manager Saltus, says: ‘We are seeing a clear shift in the behavior of high net worth families. They’re becoming more proactive and taking action earlier.’

Here are seven things the rich will do with their wealth in 2026 and what you can learn from their strategies, no matter how much wealth you have.

Maximizing pensions

Those paying workplace pensions through salary sacrifice will be hit hard by last month’s changes Budget – but we have as much as three years before the new rules come into force in April 2029.

‘This gives people time to consider their options,’ says Brian Dennehy, managing director of Dennehy Wealth.

David Little, of wealth manager Evelyn Partners, has seen a rise in inquiries about ‘rollover’ rules, which allow savers to contribute unused allowances (up to £60,000) from the previous three tax years to pensions.

Investment

Chancellor Rachel Reeves and the City will take action to ensure Britain invests in 2026. According to the Office for National Statistics, around 4.1 million stocks and shares Isas were opened last year, with around £3.1 billion invested in accounts; This is approximately 11 percent more than the previous year.

But wealthy savers are already well aware that, historically, investing in the stock market has been a much more effective way to grow their money than leaving it in cash. Investment platform Interactive Investor says Jesus Millionaires (those with at least £1 million in an Isa) invest on average 41 per cent of their money in investment trusts, 35 per cent in shares and 13 per cent in funds. On average, they have only 5 percent cash.

However, this combination may not be the key to success for all investors. Having a range of investments makes sense for most people, so you can’t put all your eggs in one basket.

Top investments include Scottish Mortgage, known for backing early-stage technology firms, and shares in oil giant Shell, pharmaceutical company GSK and Lloyds Banking Group.

Leveraging start-ups

Saltus’ Alex Pugh says high-net-worth families are stepping in earlier

The government has historically rewarded investors willing to take extra risk to support startups with hefty tax breaks, but these are becoming less generous.

Investors can deposit up to £200,000 a year into a Venture Capital Trust (VCT), a specialist type of investment fund that backs selected early-stage companies, and benefit from a 30 per cent tax relief on their investment, as well as tax-free gains and dividends.

From April 2026, the scope of VCTs and Enterprise Investment Schemes (EIS), a similar scheme where you invest directly in individual companies, will expand, allowing more investments in growing companies.

The tax relief on VCT investments will be reduced from 30 percent to 20 percent in April, but this will make them less attractive.

Wealth Club’s Alex Davies thinks the focus will shift to Seed Institutional Investment Schemes (SEIS) following the expected major investments in VCTs.

‘They offer up to 50 percent discount’ income tax relaxation,’ he explains. ‘However, these are high-risk investments and should only be considered by those who can afford to lose the capital they have invested.’

gift giving

Grieving families are expected to pay a record amount of compensation inheritance tax This amount reaches a new record of £8.2bn in 2024-25.

Estate planning is now a top priority for anyone whose wealth exceeds the threshold at which an estate becomes responsible (£325,000 for an individual, with an additional £175,000 for the main residence passing directly to descendants).

Expert Brian Dennehy says parents will increasingly be giving gifts for life

‘The trend of parents giving lifelong gifts is now likely to accelerate,’ says Dennehy. ‘Mom and Dad’s Bank will empty the vaults.’

It is possible to donate £3,000 a year without being liable for inheritance tax, and larger sums can also be given in certain circumstances; for example £5,000 for a child’s wedding. Planning early means you can distribute more.

Under the seven-year rule, gifts of any size are not liable for IHT as long as you live seven years after making the gift.

Michelle Holgate, a financial advisor at RBC Brewin Dolphin, says: ‘Giving money as a gift while you’re still alive can be much more tax efficient.

‘You also get the benefit of seeing your loved ones benefit from your generosity.’

Giving away excess

There is a less commonly used gifting rule where you can donate your excess income and immediately exempt it from IHT as long as it does not affect your standard of living.

Money cannot come from savings; It must be derived from regular sources of income such as employment, rent, pension or dividends.

Only 430 families took advantage of this exemption in 2022/23, but it is gaining popularity.

Analysis by TWM Solicitors shows the value of surplus income gifts has risen by 177 per cent to £144 million in 2023/24. It is likely to increase further next year.

inheritance insurance

RBC Brewin Dolphin’s Shaz Bishop says those who can’t make significant gifts right now are planning how to maximize what they leave behind.

Pugh adds that around a third of clients are actively looking for ways to protect their pensions from inheritance tax.

It is possible to arrange an insurance policy that pays out on death enough to cover an estate’s IHT liability, but the rules can be complex so make sure you get sound advice. ‘Note that this option is potentially unavailable to people who are in poor health or lack insurance due to other factors such as age,’ Bishop explains.

Share assets

Couples can reduce their tax liability by splitting assets or transferring them to the lower-income partner.

This will become an increasingly valuable strategy for anyone buying to rent, as the income tax rate on gains from property will rise by 2 percentage points to 22 per cent for basic taxpayers from April 2027, 42 per cent for higher rate taxpayers and 47 per cent for additional rate taxpayers.

Peer-to-peer transfer rules mean that investments and cash can be transferred between spouses without a tax bill.

Jason Hollands, managing director at wealth manager Evelyn Partners, explains: ‘Even where tax cannot be eliminated entirely, transferring savings and investments to a partner who is subject to a lower tax bracket can still help reduce overall family taxes.’