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More than a quarter of wealthy savers have taken measures to minimise a future Inheritance Tax (IHT) liability, with cash gifts proving the most popular approach, research from Paragon Bank has shown. Paragon's survey of over 2,000 active savers with balances exceeding £50,000 revealed that 28% had taken deliberate action to reduce their IHT exposure, with 68% of those choosing to give cash.

Other prevalent strategies wealthy savers are employing to lower their IHT bill include boosting their lifestyle spending (37%), creating a trust or alternative legal arrangement (27%) and arranging charitable donations from their estate (23%). Furthermore, 16% had transferred an asset, such as property or land.

The research revealed that among those gifting cash, a third (33%) donate up to £3,000 per tax year, enabling them to remain within the annual gifting threshold. Meanwhile, a quarter (24%) have made individual cash gifts exceeding £3,000.

More than a quarter (27%) of those providing cash beyond the annual gifting threshold have donated between £3,000 and £10,000, while 19% have transferred between £10,000 and £25,000 as a single lump sum. A third (30%) have donated between £25,001 and £100,000, with more than one in 10 (14%) gifting over £100,000.

Of this group, 38% expressed concern about the seven-year gifting rule, while 3% admitted they were unaware of it entirely. When questioned about the recipients of their gifts, almost half said they had given cash to their children (48%), a quarter had gifted to grandchildren (25%), 19% to other family members, and 15% had made cash donations to charity.

Paragon said the results indicated that many savers were choosing to act sooner rather than leaving wealth planning until later in life. Almost half of respondents (48%) said they had looked into IHT rules as part of their financial planning, "underlining a proactive approach to managing their finances and minimising tax liabilities".

Despite transferring money out of their estates, the majority of lifetime gifters appeared at ease with the choices they were making. More than four in 10 (44%) said they had no concern whatsoever about exhausting their funds in later life, with a further 44% saying they were not particularly worried. Just over a tenth (12%) admitted to feeling slightly concerned.

Overall, the majority of respondents held an unfavourable view of IHT, with almost two-thirds (61%) stating it was unjust and in need of reform. Just one in 10 (11%) considered it a fair means of taxing wealth.

Andrew Wright, head of savings at Paragon Bank, said: "As Inheritance Tax rules continue to evolve, many people are taking practical steps to safeguard their wealth for future generations, whether that means gifting cash, reviewing their wills or putting structures in place to manage how wealth is passed on.

"What is particularly striking is that those making lifetime gifts are largely doing so from a position of confidence. Most do not feel concerned about running short later in life, which suggests they are planning carefully and acting with purpose rather than simply reacting to future tax liabilities.

"Even with that willingness to act, IHT remains an area where many people still lack confidence. The rules can be complex, so it is important that savers take the time to understand their options and make decisions that are right for their long-term financial position, their families and the legacy they want to leave."