New research suggests that the current generation of under 34s can only expect to inherit half as much as their parents did.
The Age of Inheritance Report from HSBC found that inheritance will peak at £1.1trn by 2047. This compares to total inheritance of £194bn by 2015 and £552bn by 2062.
Inheritances are expected to be lower in the future as a result of improved longevity. This means that ‘baby boomers’ are more likely to retain their wealth, spending it in later life, than pass it on to children or grandchildren.
According to the report, those in the 44-54 age group expect to receive an average inheritance of £108,384. This expectation falls to an average of £45,662 for younger people in the 16-24 age range.
The expectation of an inheritance can form part of a Financial Plan, although it is important to be able to make reasonable assumptions before relying on an inheritance to meet required financial goals.
It is likely that, whilst we will see more wealth transferred between generations over the next thirty years, due to demographic factors relating to the ageing populating, the size of these wealth transfers will be much smaller than they were historically.
If leaving a legacy for your children is important to you, it is important to put in place a carefully constructed plan to ensure your wealth is well preserved and passed down to younger generations in the most tax-efficient way possible.
