Older generation to pass on bulk of wealth to children, not grandchildren
12 May, 2017
New research suggests that, in coming years, the bulk of the older generation’s wealth will be passed on to children as opposed to grandchildren – to the tune of more than £400bn.
The figure comes after a study carried out by insurer Royal London revealed that the average estate expected to be left behind by grandparents – who are also homeowners – chimes in at around £400,000 to £500,000.
The insurer’s survey quizzed more than 5,600 people from the older, middle and younger generation of UK adults in order to determine their plans and expectations with regards to giving or receiving an inheritance.
According to the study, the so-called ‘sandwich generation’ of 46 to 64-year olds are the most likely recipients of the older generation’s wealth, while only four million of the UK’s 17 million people aged between 25 and 44 are likely to inherit wealth from their grandparents in comparison.
However, the survey revealed that around 40 per cent of ‘sandwich generation’ adults are likely to feel ‘under pressure’ to pass on any inherited wealth to the so-called ‘millennial’ generation.
This is because approximately 62 per cent of ‘sandwich generation’ parents are concerned about the financial position of their children in their near future.
In recent months, the Institute for Fiscal Studies (IFS) has warned that today’s ‘millennials’ will, against today’s backdrop of ever-rising property prices, find it much more difficult to generate their own wealth than previous generations have.
This, in turn, could have serious implications for social mobility, the IFS has said.