One in three would rather spend in retirement rather than commit to their children’s inheritance

New data SunLife has revealed a real split amongst households on the ‘inheritance’ debate. The report, found that a third of people over 50 (32%) would rather spend their kids’ ‘inheritance’ on enjoying their own retirement, even if it means there would be nothing left to inherit.

With 63% of over 50s worrying about the cost of living, and 34% about running out of money in retirement, it’s no wonder priorities are changing. Especially given a recent study which concluded that baby boomers are set to live longer but in poorer health than previous generations, meaning potentially high medical and care costs on the horizon to take into account.

And adult kids aren’t blind to these pressing financial concerns. A third (33%) of those with living parents would prefer their parents to spend their hard-earned cash on themselves, even if it meant no inheritance.

However, a similar number are either hoping (27%) – or relying (6%) – on an inheritance. And it is older ‘children’ that are the most likely to be depending on money being passed down with one in 10 (10%) of people aged 55-64 saying they are relying on inheritance from their parent(s) to fund their own retirement.

The research also found that a popular way of passing on family money is through early inheritance. 7% of Brits – rising to 12% of 45-54 year olds – say they could do with the money now, rather than waiting another 10 to 20 years and 21% – the equivalent of 5.4 million people – say they would prefer to give early inheritance so they can see loved ones enjoy the money, rather than leaving inheritance in their estate.

Clearly many see more benefit in their loved ones getting this money early. In fact, 1 in 4 (25%) of people over 50 – equivalent to around 6.5 million people – have given their loved ones a ‘significant cash gift’ in the past five years, rising to 36% of people aged 70 and over.

Of that 6.5 million, 17% (1.1million) said the gift was purely for ‘early inheritance’ rather than for anything specific. Other reasons for gifting include helping with home deposits (19%), general cost of living help (23%), help repaying debt (14%), or to put towards a vehicle (17%) or wedding (13%).

Mark Screeton, CEO at SunLife said “Our data shows that amid the pressures of high cost of living, the subject of ‘inheritance’ is quite divisive. 43% of over 50s would like to leave money behind – and 12% will sacrifice their own retirement to do so – but a third of those they are scrimping for say they’d rather their parents spent their money enjoying retirement.

“But on the other hand, 27% say they’d like to receive an inheritance, and a further 6% say they are actually relying on it. So, it is clear we need to be having more open conversations with our loved ones about all the financial options.”
 

	Overall	50-59 YO	60-69 YO	70+ YOs
I would like to leave some inheritance to my family	43%	40%	43%	50%
I would rather spend on enjoying my retirement even if it means less/no inheritance for my family	32%	31%	33%	29%
I would like to give early inheritance so I can see my family use the money	21%	21%	21%	22%
I would like to save enough to leave an inheritance, even if it means cutting back my spending in retirement	12%	12%	11%	12%
I would like to give early inheritance so I can mitigate the Inheritance tax (IHT) liability	12%	12%	11%	10%