An expected inheritance often features in the Financial Plans we construct for our clients, although we stress the importance of not relying on this source of wealth as a panacea for all things.
The timing and amount of an expected inheritance can be notoriously difficult to predict with any real degree of accuracy.
With all of us living for longer, and with pressure on retirement income due to lower gilt yields, we often see inheritances arriving later and arriving smaller than originally expected.
Some new figures from the Office for National Statistics found that British adults inherited a not too shabby £75bn in the years between 2008 and 2010.
1.6 million people were the recipients of £1,000 or more.
Only one in ten received £125,000 or more as an inheritance during this time, with half of beneficiaries receiving less than £10,000.
The vast majority of inheritances consisted of at least some cash savings.
The figures came with a reasonable warning from the ONS, about what they expect to see happen in the future:
“Popular projections point toward a growing older population in Great Britain. There are significant costs associated with living longer, whether to maintain a reasonable standard of living or to pay for care bills,”
“These financial pressures come during a time where incomes are likely to be lower than during working life. Such expenses are likely to diminish, if not exhaust assets which might traditionally have been passed onto others.”
In other words, you cannot rely on an inheritance to fund your lifestyle in the future.
If you are the recipient of a substantial inheritance, then clearly you have important decisions to make about how you might best put that new found wealth to work.
