Our latest research reveals parents are under pressure to pass on inheritance. Find out what this means for your ‘baby boomer’ clients.
Housing wealth in the UK is becoming increasingly concentrated amongst older generations. Home ownership rates amongst the under 45s have been falling steadily, whilst older homeowners have benefited from high levels of house price inflation. But what will happen to that housing wealth in the future and which generation will ultimately benefit? Will older generations decide to draw on their housing equity in order to boost their standard of living to the detriment of the next generations? Will they pass it on to an already relatively prosperous ‘sandwich’ generation who will retain it to further boost their standard of living? Or will this wealth ‘cascade’ through the generations, riding to the rescue of struggling millennials who might otherwise have no hope of getting on the housing ladder?
This report provides some insight into these questions based on a major piece of research commissioned by Royal London and undertaken in partnership with YouGov. Over 5,600 respondents were surveyed, covering three generations. They were asked their plans about bequests and inheritance, and about their expectations of other generations. The research focused on three main groups:
- A ‘grandparent's generation’ aged 65 and over who have a home that they might pass on to children and/or grandchildren; around 4.5 million people in the UK would fall within this category;
- A ‘sandwich generation’ of parents aged 45-64 who had living parents from whom they might expect to inherit as well as adult children who might be looking for support; around 7.7m UK adults fit this definition;
- A ‘children’s generation’ of adult children aged 25-44 who have parents and grandparents living in owner-occupied accommodation; we estimate that there are around 4.2m people in this situation in the UK.
Our research finds some striking differences in the way in which different generations view the passing on of wealth between generations.
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