Published On: Thu, Mar 14th, 2024

Inheritance saving should be a priority, according to millennials | Personal Finance | Finance

Inheritance has long been considered a significant aspect of financial planning for many families. In fact, nearly half (46 percent) of people polled expect to receive an inheritance from their parents.

The survey, commissioned by Lime Solicitors with 1,000 respondents, found one in five (21 percent) are “relying” on this inheritance to supplement them financially in the future, while 19 percent fear that their quality of life will be impacted if they do not receive an inheritance from their parents.

Meanwhile, Britons polled by Moneyfarm found one in three millennials worry they may receive no inheritance because of their parents’ spending habits.

Up to 41 percent went so far as to call their mum and dad “spendthrifts”, with almost a fifth (19 percent) believing their parents aren’t thinking enough about their children’s or grandchildren’s financial futures.

It may come as no surprise that nearly four in 10 (35 percent) respondents aged between 35 and 50 believe it’s their parent’s responsibility to provide for them through inheritance.

The study also found that millennials don’t think they should have to wait for their inheritance, with four in 10 (46 percent) believing that their parents should gift them money early.

Paying off a mortgage (18 percent), financing their retirement (17 percent) and providing a nest egg for their children (13 percent) are the main intended uses for Moneyfarm’s respondent’s inheritance.

However, concerns extend to parents, too. According to research by RBC Wealth Management inheritance and remains one of the top three financial concerns for wealthy Britons.

The poll also found that the wealthy are concerned about giving too much too soon.

Nick Ritchie, senior director of wealth planning at RBC Wealth Management said: “The survey results point to the wealthy re-evaluating later life priorities and wealth stewardship, a trend likely prompted by the UK’s uncertain political and economic future, which could potentially alter the future landscape of intergenerational transfers.”

He added: “What is also interesting is that we’re seeing that the younger wealthy are showing the highest level of concern over wealth transfer, according to the research.”

Chris Rudden, head of investment consultants at Moneyfarm, argued that younger generations are now “generally poorer” than their parent’s generation.

This is due to soaring and global stock markets increasing “far more” than wages over the last 20 years.

He added: “This combined with the fact that wages have also struggled to keep pace with inflation in recent years, means that 35- to 50-year-olds are likely to be far more reliant on a future inheritance than previous generations.”

Despite the arguments, six in 10 (60 percent) of Moneyfarm’s respondents aged over 65 say they are scrimping as much as possible to save for their children and grandchildren, with two-thirds (66 percent) regularly paying money into a account.

Additionally, 17 percent said they have reduced the number of holidays they take, while 16 percent say they are planning to work past their official retirement age – all to build up a meaningful financial legacy.

Mr Rudden said: “If millennials are to financially succeed in the long-term it is crucial they plan for their future because they may not be inheriting as much as they are expecting.

“Equally, if it is the desire of the older generation to leave an inheritance, they need to plan carefully in order to leave anything meaningful.”

Do you think parents should save towards an inheritance for their children? Have your say in the comments.

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