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A quarter of over-75s raid inheritance to help family

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One in four over-75s raid their planned inheritance to support family members rather than leave it as part of their estate, according to Aviva's latest Real Retirement Report.

A quarter of over-75s and more than a fifth of over-55s in total have given a cash loan to family members instead of leaving an inheritance, with nearly one in ten over-55s regularly giving money to family to avoid paying out the UK’s inheritance tax (8%). 

The spring edition of the report examines the financial pressures faced by the UK’s three ages of retirement – 55-64s (pre-retirees), 65-74s (the retiring) and over-75s (the long-term retired) – and focuses specifically on attitudes to inheritance.

It shows just 7% of over-55s rate leaving inheritance as their top financial priority in retirement, and while this predictably increases with age, just 18% say the same by the age of 85.

Nearly a quarter of pre-retirees do not expect to leave an inheritance, as meeting living costs and providing immediate financial support comes before leaving inheritance. It is only after the age of 65 that it becomes their second priority after managing the cost of living.

However, the report also highlighted that instead of leaving an inheritance, the over-55s are open to various alternatives to pass on any available wealth. There is a clear generation gap in their attitudes separating the pre-retirees – who are most willing to consider other approaches – from the long-term retired who are more traditionally minded.

To increase their available wealth, shopping around for the cheapest deals – for example, during their weekly food shop – is the most popular step the over-55s would take (18%).

More than one in ten would downsize or move to a cheaper home (12%) and a similar number would work part-time in retirement (11%) or take fewer holidays abroad (10%).

With savings squeezed, property is becoming a bigger feature of people’s inheritance plans. Nearly two thirds of over-55s plan to leave behind the family home (65%) yet only a third received this from their parents (34%).

More than twice as many expect to leave other property or land (8%) as received this from their parents (3%).

However, up to 16% of over-55s have seen their later life plans impacted by the housing market crash which has left them with less property wealth either to leave as an inheritance (12%) or release equity in order to help their finances in retirement (4%).

Clive Bolton, managing director of Aviva’s At Retirement business, said: “Many over-55s who bought their homes much earlier in life have benefited from growing house prices in the decades since and understandably hope their family will share the proceeds as part of their inheritance.

“Anyone who needs to call on their property wealth at an earlier point – either to support themselves or family members – can aim to downsize or take out inheritance protection with equity release plans to safeguard a fixed amount for their loved ones’ future use.”

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