The current younger generation are set to receive the biggest ‘inheritance boom’ of any post-war generation, but will have to wait until they are approaching retirement to benefit from the windfall, according to a new study.
Independent think tank, the Resolution Foundation, has estimated that so-called ‘millennials’ are set to benefit from a significant increase in the amount of inheritance they receive over the coming years, as the average value of estates passed on by parents and grandparents continues to rise.
Over the next 20 years, the Resolution Foundation has calculated that the total value of inheritances will more than double.
However, due to the relatively high life expectancies of their parents, it is thought that most millennials (defined as those aged 17 to 35 for the purposes of the study) will, on average, not receive their inheritance until the age of 61.
Despite this, young people are still expected to benefit in the short-term, after separate studies found that an increasing number of grandparents are passing on a portion of their estate to grandchildren in their Wills, in a bid to help them take their first steps onto the property ladder.
Anyone thinking of leaving an inheritance to their children or grandchildren should always seek specialist financial advice well in advance.
This is particularly important in terms of IHT, which is levied at a rate of 40 per cent on the total value of any estate passed on in Will worth £325,000 or more. As almost two-thirds of young adults have parents that own property, many estates could be liable to pay IHT.
Worrying research carried out by insurance company, Drewberry, in late 2017 found that 87 per cent of UK adults who intend to pass on an inheritance have never sought specialist advice in relation to the IHT implications of doing so.