Do you expect to receive a significant inheritance during your lifetime? What impact would it have on your financial future?
The Institute of Fiscal Studies (IFS) has reported that the financial resources of younger generations are increasingly affected by inherited money as the decline in home ownership and reduction in occupational pension schemes makes it harder for them to increase their own personal wealth.
Interestingly, the pensioners with the most to pass on are also more likely to have received a significant inheritance themselves so it appears to be the case that 'family money' is passing down the generations. The beneficiaries of these larger inheritances are also more likely to have high lifetime earnings.
The figures indicate that inherited wealth may be an increasingly important factor in the lifetime resources of younger generations, possibly with an impact on inequality and social mobility.
Families should make sure that proper planning is in place to pass assets on in a tax efficient way, or to protect assets for future generations.
Looking at current pensioners, we find that those with the highest lifetime incomes are also those who have inherited the most across the course of their lives. High-lifetime-income individuals are around twice as likely as low-income individuals to have inherited something, and many times more likely to have inherited hundreds of thousands of pounds. There is evidence that these patterns are likely to be maintained among younger generations: those with higher incomes are much more likely to either have received an inheritance or expect to receive one in future.