The Centre for Economics and Business Research (CEBR) said the ‘inheritance economy’ is set to boom over the next 10 years, with the total amount passing from one generation to the next forecast to rise from £69bn a year to £115bn each year to 2027.

A report by the think tank and estate administrators Kings Court Trust found that the 66% increase in intergeneration wealth transfers will be heavily driven by the rise in property prices over the next decade. Over the past 20 years, house prices have risen by 273%.

Christopher Jones, sales and marketing director of Kings Court Trust, said: “The revelation that inheritances will hit £1trn in the next decade is quite astonishing, but makes perfect sense given the amount of accumulated wealth being held by the UK’s older generation.

“Between 2012 and 2014 just over one million people received an inheritance of more than £1,000 in a given year with around 870,000 receiving cash gifts of more than £500. But over the same period, the average inheritance rose from £43,000 to £54,000, so significant amounts of money are already passing into the hands of the younger generation.

“As mortality rates increase and the concentration of wealth in the hands of the older generations rises, the number of adults receiving higher amounts as an inheritance is also set to rise. By 2047, we could see as much as £335bn a year passing to the younger generation, which is a staggering amount of money.”

Jones said this presents a problem for those passing on their wealth, and for those receiving it.

As such, it’s vital that people plan ahead to pass on as much of this wealth as possible without paying more inheritance tax than necessary.

See YourMoney.com’s What can you do to reduce your IHT bill? and Property and inheritance tax rules are changing: what you need to know for more information.