Young adults increasingly dependent on inheritances
The Institute for Fiscal Studies (IFS) has reported that inherited wealth is an increasingly important determinant of the lifetime financial resources of younger generations. This is due mainly to the fact that elderly people today have more wealth than their predecessors, primarily as a result of rising homeownership rates and rising house prices.
Young adults are finding it harder to accumulate wealth of their own due to a sharp rise in property prices, combined with the dramatic decline of defined benefit pensions in the private sector and the stagnation in household incomes.
The IFS has recently published research to show that the wealth of those over 80 years of age has increased by around 45% over the past decade to 2013. At the same time, the number of people who think that they will leave amounts of £150,000 or more has risen from 24% to 44%.
The proportion of individuals who have received or who expect to receive an inheritance has risen rapidly across the generations.
Of those born in the 1970s 75% have either received or expect to receive an inheritance, compared with 68% of those born in the 1960s. This compares to 61% of those born in the 1950s, 55% of those born in the 1940s and less than 40% of those born in the 1930s.
Regardless of the value of your estate, you should ensure that you have a valid Will in place so that your hard-earned wealth passes in accordance with your wishes.