Almost a third (32%) of those who have received an inheritance, of lifetime gift, or who expect to in the future plan to use the fund towards savings and their own retirement funding.
Almost half (43%) of UK adults expect to receive an inheritance or lifetime gift, with those under the age of 45 the most likely to expect an inheritance (65%), according to new research from Fidelity International.
Less than half (45%) of those surveyed by Fidelity International for the report had taken some form of investment advice. A fifth (20%) went to another professional for advice, while 16% looked online and just 15% spoke with an independent financial adviser (IFA). Just over one in ten (14%) spoke to their bank.
The average inheritance received currently stands at £70,639, with lifetime gifts amounting to £58,439.
Whilst finding savings and retirement is the most common use of the inheritance, a quarter (24%) who have inherited have used this to pay off a mortgage, while over a fifth (22%) put the money towards climbing the property ladder.
Other plans include paying for one-off expenses or ‘luxury’ items (18%), paying off debts (17%) or student loans (9%), or funding-to-day expenses (14%).
Dawn Mealing, head of advice policy and development at Fidelity International, said: “Financial advice can provide invaluable support for those looking to pass wealth on, as well as to those who receive it. From the perspective of the older generation, seeking advice can help them to navigate the complexities of Inheritance Tax (IHT) and mitigate some of the potential losses the 40% rate might pose.
“For those who receive an inheritance, it could well be one of the largest single sums of wealth they ever receive. Financial advice can offer invaluable support and peace of mind when it comes to knowing how best to approach this, particularly when the recipient has specific financial goals in mind. This can also place them in the best possible position to start planning how they might want to support their own dependants further down the line, giving investments made on behalf of their own children time to grow.”
While younger generations may expect to receive an inheritance, they were less confident about their ability to pass on wealth to dependants themselves. Of those surveyed by Fidelity International, 57% of under 45s (increasing to 59% of under 35s) were worried about how they will afford to pass on an inheritance while maintaining their own standard of living, although more than half (55%) of those under 45 still intend to do so.
Research conducted was by Opinium between 28 June and 2 July 2021 amongst a nationally representative sample of 2,000 UK adults.
Leave a Reply