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Retirement

Growing numbers will spend inheritance on living costs

Lucinda Beeman
Written By:
Lucinda Beeman
Posted:
Updated:
14/04/2014

A growing number of Britons expect money they bequeath will go towards the day-to-day living expenses of their heirs, research has found.

As living costs continue to rise, even affluent Brits believe their legacy will increasingly go towards paying down debts and maintaining the lifestyles of their heirs, according to the the study by Close Brothers Asset Management.

Some 38 per cent now expect their beneficiaries to spend inheritance on the cost of day-to-day living, compared to just 23 per cent who actually did so themselves.

Patrick Haines, regional head of advice at Close Brothers Asset Management, said: “The way people expect their legacy to be used has changed, and reflects the rising cost of living. It’s crucial that those receiving inheritance understand the trade-off between short-term expenditure, and long-term financial security. Those spending wealth that traditionally could have supplemented income in retirement may encounter financial difficulty further down the line.”

Just 29 per cent expect their beneficiaries to put a portion of their inherited assets towards buying a new home- a sign of the direct impact of rising house prices, according to Close Brothers – while 21 per cent expect their beneficiaries to pay down debt.

While 67 per cent of affluent Britons used inheritance they themselves received for investments or savings, only 57 per cent now expect that their heirs will do the same.