Attitudes to inheritance are changing as a result of increased longevity, according to a new piece of research from the UK by think-tank the Social Market Foundation (SMF).
A poll conducted as part of the research found significant support for in-life gifting rather than leaving an inheritance, leading researchers to conclude that the majority of people believe that money is better handed down the generations when it is needed, rather than on death.
The report revealed that:
- Across the whole population, six out of ten agree with the statement: ‘It is better to give children money when they need it than to save it to leave as an inheritance’. The proportion is higher amongst older people, with 69% of over 65-year-olds agreeing with this.
- A number of motivating factors, such as housing costs, appear to have caused this shift. A majority of the public (60%) agree that ‘it is impossible for younger people to get on the housing ladder without support from parents’.
The SMF identify a number of potential social and policy challenges arising from the findings, including:
- A shift from end of life inheritances to in-life gifting could lead to increasing pressures on the finances of retirees. Retirees may have to balance the twin pressures of younger family members needing support for major life events and living costs versus their own need in retirement.
- Increases in financial transfers between grandparents and grandchildren could potentially lead to a ‘skipped middle’ generation. This generation has high expectations for receiving an inheritance, with many relying on a lump sum to help them fund their own retirement. However, they may be overlooked by older generations in favour of the young, for whom the need for money appears stronger.
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