Generation avocado set to benefit from legacy windfall
More than 11 million people in the UK aged between 25 and 45 expect to receive some sort of inheritance from their parents or grandparents. This is according to a recent report by national financial services firm Sanlam UK.
The Generation Game specifically examines the intergenerational transfers of wealth that are expected to take place in the UK over the next 30 years. It found, of those 5.1 million likely to receive more than £50,000, the mean average value of the inheritance expected is £233,000, or £1.2 trillion in total.
Sanlam UK chief executive Jonathan Polin said these prospected inheritances were ‘unprecedented’, but also presented challenges.
‘This level of inheritance is unprecedented, and its transfer presents both opportunities and challenges for the financial services profession and society more generally,’ he said.
‘Clearly the recipients of this wealth 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, over reliance on inheritance could be risky, especially if it affects the younger generation’s level of engagement with savings and investments today,’ said Polin.
‘As a first step, families need to have full and frank conversations about inheritance. This will help ensure younger generations have a realistic expectations of what they are to receive and can prepare accordingly.’
Click on to read the key takeaways from the report.