Uncovering Attitudes on Intergenerational Wealth Transfer

1-in-4 Baby Boomers don’t trust the younger generation to use their inheritance wisely, according to this national survey conducted by YouGov for Progeny. The report aimed to uncover national attitudes around intergenerational wealth transfer, either through leaving money as an inheritance or gifting it during their lifetime.

Over the past 50 years, a number of specific economic conditions – generous pension schemes, healthy stock market performance, increased home ownership and a steady rise in house prices – have allowed many of the Baby Boomer generation to become wealthy.

Now this generation is in the process of passing their assets on to the generations below. The ‘Great Wealth Transfer’ will see an estimated £5.5 trillion1 transfer from the older generation by 2055. For many families this process is already underway.

The report focuses on five themes to understand how the country feels about inheritance and passing on money between the generations: intention; communication; emotion; expectation; and aspiration.

Main Findings:

• Nearly half (48%) of Baby Boomers say the attitudes and priorities of younger generations affect their decision-making around transferring wealth to the next generation.
• The majority of respondents said they intend to pass on something to the next generations of their family, with 60% planning to do so.
• However, of those aiming to provide financial support or inheritance to loved ones, the majority questioned (49%) didn’t know, beyond that, how they might do it.
• Fewer than half (47%) of Baby Boomers were confident about making plans or taking financial decisions about transferring wealth, and a third (32%) said they were not confident.
• Around the same proportion of Generation X and Millennials (45%) were confident about making use of any received inheritance, versus 39% who said they were not confident.
• Regional variations: Scots are least confident about making plans or taking financial decisions about transferring wealth to family or loved ones – 31% feel confident as opposed to 57% confident in the east of England, 52% in the south of England.
• Those in the south of England are also most likely to have professionally written will in place (48%), with those in the Midlands and Scotland being least likely (31%).
• Those in the north of England are most likely to seek professional advice to better manage an inheritance (41%) compared to just 25% of Londoners and 22% in Wales.
• However, one fifth of respondents said that they didn’t want to pass on a significant sum of money to their loved ones.
• Nearly half of those questioned (49%) felt it was more important to use their money to enjoy life to the full than to leave an inheritance.
  • Regional variations: People in the east of England feel it is more important to use their money to enjoy life to the full than to leave an inheritance more than any other area in the UK (58%), followed by 53% in Wales and 50% in the south of England and Scotland.
• There was clear evidence of the impact of the cost-of-living crisis in the immediate financial goals of the survey respondents.
• The highest proportion (45%) said that ensuring they meet regular financial commitments was their top financial goal, followed by 35% who wanted to have enough cash in case of emergencies and 29% who were focused on saving enough to enjoy retirement.
• At the top of their list of financial concerns or challenges was the increase in the cost of living (59%), followed by their anxieties over not saving enough (43%) and not having enough for emergencies (39%).
• More Millennials were concerned about an increase in daily living costs than the other generations – 78%, compared to 59% of Gen X and 41% of Baby Boomers.
  • Regional variations: A rise in day to day living costs rated as the greatest financial concern or challenge across all regions, with those in the Midlands most concerned (64%) compared to 52% in the east of England.
• The difficulty of communicating on such a sensitive topic was a consistent theme in the research. The majority of Millennials and Generation X (41%) found it ‘uncomfortable’ to discuss inheritance and wealth transfer with their parents.
• Only 58% of Baby Boomers said they have discussed inheritance or gifting with loved ones.
• Amongst those who did expect to one day talk about passing on money to the generations below, the majority (53%) said they wouldn’t tell the beneficiaries the amount they will be receiving.
  • Regional variations: Welsh people are most likely to have discussed their plans to financially support their loved ones or provide an inheritance with them (69%), with Londoners being least likely (53%).
• Millennials and Generation X in the Midlands feel least comfortable about discussing their parents' inheritance plans with them. Only 31% feel confident, with those in the south of England most comfortable about doing this (50%).
• Amongst those expecting to receive inheritance or wealth, when asked how they were planning to use this money, the most popular answers were to build their savings pot (35%), fund retirement (29%) or pay off their mortgage (25%).
• 1-in-10 said they intended to use it to leave a further financial gift in their will for their family.
• Nearly two-fifths (38%) of those expecting to receive an inheritance did not know the amount they would be receiving.
  • Regional variations: Londoners have the highest expectation of inheriting property (86%) whereas Scots are most likely to expect to inherit cash (90%).
• A quarter of Londoners don’t know what they would do with an inheritance (25%) compared to only 5% of Scots. Those in the Midlands are most likely to use an inheritance to fund their savings (53%) whereas those in the south of England favour paying off their mortgage (39%).

<--- The article continues for users subscribed and signed in. --->