Over £400 billion in wealth being held by Britain’s grandparents is set to cascade down through the generations in the coming years, new research has revealed.
According to insurer Royal London, around four million of the 17 million aged 25-44 are in the “fortunate position” of having grandparents with housing wealth.
The data was collected for Royal London by YouGov who surveyed over 5,000 people from three generations.
The survey found that the typical estate home-owning grandparents were planning to leave was worth between £400,000 to £500,000.
The sandwich generation aged 45-64 were most likely to benefit from this wealth.
However, they felt the most under pressure to pass on any inheritance, partly because they are more in touch with the challenges being faced by their Millennial children.
Over two in five of the sandwich generation said they felt pressure to pass on wealth, compared with just under one in five of the grandparents’ generation.
The report argues that policies designed to help generation rent need to focus more on those who will not benefit from inherited wealth.
It points out that the Lifetime ISA, which adds £1,000 per year of taxpayer top-up to those who can save £4,000 will tend to reinforce the advantages of those who already have access to wealth and will not be of much benefit to struggling renters with no inherited wealth.
Steve Webb, Royal London’s director of policy, said: “There is a wall of housing wealth set to cascade through the generations in the coming years. Grandparents still attach great importance to passing on their wealth rather than consuming it.
“Many in the next generation feel under considerable pressure to pass any inheritance straight on to their own children as they are acutely aware of the challenges faced by their Millennial offspring.
“Those Millennials lucky enough to have home-owning parents and grandparents may be set to benefit from significant inheritance which will help them onto the housing ladder. But the majority of Millennials are not in that position.
“Schemes such as the Lifetime ISA which provide a government contribution of £1,000 per year for those who have £4,000 per year to save will tend to favour precisely those groups who already have access to wealth. There is a danger that this will reinforce the advantage of those who are set to benefit from a cascade of wealth from the older generations.”
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The Government should STOP all inheritance tax as the money has already been taxed during the person’s lifetime. They then want to tax you again!!
What do other people think about the new probate rules? Another of Osborn’s tax collecting exercises. I am not one of them, but there will be many people in the London conurbation who have property worth over one million. By the time you have added as the assets together some will be over the two million mark. This will trigger a payment of £20,000 for the probate to be granted. What a cheek! He was a conniving chancellor where most of his assets ate overseas. Don’t worry about anyone else-look after yourself! Terrible problem for many people. If you cannot pay the tax this will have to be borrowed from a bank until something is sold to settle the debt. Shame on a Conservative Government.