11.6 million received an inheritance in last 10 years
More than one in five (22%) adults have received money as an inheritance, rising to nearly one in three (29%) among those aged between 65 and 74, according to a study commissioned by Key.
The equity advice specialist found that over 11.6 million people in the UK have received an inheritance in the past 10 years, with the average age at which people receive this windfall sitting at 47 years old.
But nearly one in three are inheriting when they are over 65.
Who inheritance money comes from
More than half (51%) of those who have received inheritances were left money by their parents while a fifth (19%) received cash from grandparents.
Around 16% were left money by uncles or aunts and 13% received cash from family friends.
Cousins were the source of inheritance for 11% of those who have received windfalls in the past 10 years with siblings leaving money in nearly one in 10 (9%) of cases.
Parents are most likely to leave the biggest inheritance – on average £65,600 – while grandparents on average leave £24,200, the research found.
Increase in living inheritances
An inheritance is helpful at any age, but Key noted that ‘when you contrast the average age of inheritance (47 years) with the average first time buyer age (33 years), it is not hard to see why the idea of ‘pre-inheritance’ has gained prominence’.
Will Hale, CEO at Key, explained: “The idea of inheritance arguably works best when the person receives the support at a time in their life when it can do the most good for their long-term financial security. However, with the average age of inheritance sitting at 47 years old – when people are more likely to have built up assets – we are seeing more conversations happening about providing people with a ‘pre-inheritance’.
“Not only do people benefit from the support when they need it but their older relative is able to enjoy seeing the difference that it has made to their lives. However, getting good financial advice is important to ensure than not only do they not fall foul of inheritance tax regulations but there is sufficient assets to cover potential care costs in older age.”
Inheritance money is spent wisely with around 3.9 million people investing or saving some or all of the cash, 1.1 million using the money to buy their first home and 1.7 million paying off their mortgage thanks to an inheritance. Nearly one in 10 (9%) put some or all of the cash into their pension.