Four in ten admit they are relying on Inheritance for financial security

Half of people admit they have checked what their parent’s home is worth with over four in ten admitting they are relying on an inheritance for future financial security according to research by Zoopla.

The figures show that more than four in ten (43%) are relying on inheritance from home-owning parents during increasingly challenging economic times. In fact, half (50%) of British adults whose parents own a property admit they have checked the value of their parents’ property

Despite basing their future financial security on their inheritance, only 30% say they have actually spoken with their parents about how much they are likely to inherit. Among people whose parents own a property, the average amount they expect to receive is a massive £195,687, with the vast majority (£182,621) of this money coming from property inheritance alone.

Many are making lofty plans with inheritance they’ve not yet received. Almost six in ten (58%) people expect to be able to move house, upgrade their home or pay off some or all of their mortgage as a result of receiving their inheritance. Of those, 36% are renting until they inherit, at which point they will buy to get on the property ladder, whilst 29% have gone as far as to purchase a home on the basis they will be receiving inheritance in the future to help pay their mortgage.

Although people claim the primary reason for checking the value of their parents’ home was for their parents’ benefit, with 36% saying it was to provide financial advice, a third (33%) admit the reason they checked the value was to get an estimate of their inheritance, and 27% check out of pure curiosity.

Beyond checking the value of the home, many even admit to making plans for the home they expect to inherit whilst their parents still live there. Amongst those expecting to inherit a home, nearly half (44%) have designs on how they would change it and, incredibly, one in seven (14%) have already started to make changes.

Despite the fact most people whose parents own a home are expecting to inherit it (68%), fewer than a third (30%) have asked them how much they are likely to receive. The primary reason people give for not asking is they believe it is not any of their business (30%) whilst others opt not to simply because it is too awkward (13%). Of the 12% of people who checked the value of their parents’ home in secret, 30% admitted this was because it would be embarrassing or awkward to admit they had checked, and 25% because they didn’t want to look money-grabbing or for their parents to get the wrong idea.

Discussing the topic of inheritance is often seen as taboo, with a quarter (25%) of respondents agreeing that it is not acceptable to talk to anyone about inheritance. However, 43% believe it is acceptable to talk to your parents about inheritance, but only 19% believe it is acceptable to talk to your children about inheritance, suggesting that, whilst children may be keen to discuss inheritance with their parents to help financial planning, parents would prefer not to discuss it.

Perhaps explaining why so many are wary of discussing the topic, 30% say they have fallen out with family members in the past over inheritance discussions, and 51% think inheritance could be the cause of family arguments in the future. Currently, 41% of people with home-owning parents say they have never discussed inheritance with family.

Daniel Copley, Consumer Expert at Zoopla said “With house value data now easily available to access online, it’s interesting to see that so many are using this, not just to get an idea of what their own home may be worth, but to get an idea of the sort of amount  they may get in terms of parental inheritance in the future. Whilst some may consider this a little cheeky, it’s actually really important to have an idea of what may be coming your way in future, so you can plan financially for the long-term, especially with regards to property decisions.”

“The best advice is to have an open and honest conversation with your parents about this, but we know that most people – parents and kids alike – find the subject too difficult or awkward. As such, we’ve created a calculator for those curious about property inheritance, that gives them an idea of what they could receive, based on future home value, without the awkwardness. This is based on the actual estimated value of their parents’ home, as well as other factors such as how many siblings they have.”

Robert Green, Director at John D Wood & Co said “Discussing inheritance is really circumstantial, for example if property forms part of a family business, it seems reasonable that different generations discuss their plans – often at the discretion of parents or grandparents.”

“Many families discuss estate planning. Covid has perhaps jolted the, generally more healthy, baby boomer generation into considering ‘what’s next?’ For some, it’s possible to pass on wealth in a more tax efficient way, though this can be at the expense of losing control of the money pre death, meaning there needs to be a healthy surplus, or a high degree of trust with the children and any spouses.”

“The ‘Bank of Mum & Dad’ is also a way of passing on wealth, often by helping with a deposit. Although we do frequently see high value property in Chelsea funded fully by parents, who wish to set up their children, and seeing this as a sound way to do so, whilst avoiding inheritance tax in due course.”