You are here: Home - Retirement - Retirement planning - News -

Younger generations put off saving as they expect to inherit £1.2trn

Written by: Paloma Kubiak
Almost a third of those expecting to receive a substantial inheritance admit to putting off saving and ‘live for the now’ because they have a windfall coming.

Almost two-thirds (64%) of 25-45-year-olds expect to receive an inheritance from their parents or grandparents. This equates to 11 million people in the UK.

Nearly half of this number (5.1 million), expect to receive at least £50,000 in fixed assets or money, with the average value standing at £233,000.

The ‘Generation game report’ from Sanlam UK suggests those aged under-45 expect to receive 1.2trn from parents and grandparents in the next 30 years.

But, four in 10 of those expecting an inheritance haven’t yet spoken to the gifting party about their plans. Sanlam said this could reveal a mismatch between expectation and reality.

Further, younger generations could end up being over-reliant on their expected windfall.

Almost a third (31%) of those 25-45-year-olds surveyed admit to putting off saving and “living in the now” because they know they have money coming to them. A similar number (34%) said they will be reliant on their inheritance to help with their finances in the future.

However, a quarter said the inheritance will be used to pay off debt, while 34% said the money will go towards buying a property, 34% said they will save or invest the amount.

Other uses included setting up a trust (23%), starting a business (15%), and using it to retire early (17%).

Sanlam UK CEO, Jonathan Polin, said the report highlights the scale of intergenerational wealth transfer that the UK is set to see over the next few decades.

“This level of inheritance is unprecedented, and its transfer presents both opportunities and challenges for the financial services industry and society more generally.

“Clearly, the recipients of this wealth – many of whom straddle the line between millennials and generations Xers – are relying on their inheritance to act as a financial panacea. This is understandable in the context of rising debt levels, stagnant wage growth, and spiralling property costs, all of which have had a deleterious effect on disposable income.

“That said, overreliance on inheritance could be risky, especially if it affects the younger generation’s level of engagement with savings and investments today. As a first step, families need to have full and frank conversations about inheritance – this will help ensure younger generations have a realistic expectation of what they are to receive and can prepare accordingly.”

Related Posts

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Budget 2021: New ‘green’ NS&I savings account

The government is launching a new green savings bond via National Savings and Investments (NS&I).
Budget 2021: New ‘green’ NS&I savings account

How to claim the fourth self-employed grant

HMRC has emailed thousands of freelancers to explain how the fourth Self-Employment Income Support Scheme (SEI...
How to claim the fourth self-employed grant

M&S Bank to close down all current accounts

M&S Bank is ditching current accounts and shutting 29 in-store bank branches in order to focus on credit c...
M&S Bank to close down all current accounts

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week

Read previous post:
‘Shameful’ as government misses pension cold calling ban deadline

The long-awaited ban on pension cold calling was due to take effect by the end of June but the date...