Over-55s worried about children ‘squandering’ their inheritance

  • Our report finds that 48% of over 55s are worried about how their children will use their inheritance

  • 59% worry millennials receiving inheritance won’t have adequate financial advice

  • Those over–55 expect to leave behind an average inheritance pot of £257,000

Nearly half (48%) of those planning to leave an inheritance to the younger generation are concerned about how they will use the money, according to a report by Sanlam UK. Without correct financial advice, younger generations could face the prospect of the pot disappearing and not being able to pass on any wealth themselves.
 
The Generation Game report, which looks at the intergenerational wealth transfer expected to take place in the UK over the next 30 years, reveals that on average, those over 55 expect to be passing on an inheritance of over £257,000 to either their children or grandchildren.
 
Alongside worrying how the younger generation will spend the inheritance, those over 55 are concerned about the lack of advice the recipients will receive. Nearly two thirds (61%) fear that the younger generation are not getting adequate financial advice, with 59% explicitly wanting the beneficiaries of their wealth to see a financial adviser about their inheritance. A third (33%) stated they’d like the beneficiaries of inheritance to use a financial adviser already familiar with the family’s finances.
 
Inheritance clearly remains a conversational taboo. Even though nearly half of the over 55s surveyed are concerned about how their next generation is going to manage their inheritance, only one in ten (9%) have spoken to the recipients of their wealth about seeing a financial adviser. This raises the prospect of a mismatch between their expectations and reality. Over a third (35%) of those who admit to not having yet spoken with the intended recipients say that they find the subject too hard broach with their loved ones. Just one in five (18%) think it is the job of the donor to bring up the subject.
 
Penny Lovell, CEO of Sanlam UK’s Private Office, said: “The matter of inheritance can be difficult and emotional for anyone to approach. It is not every day that we have to consider what happens to our money when we have passed away. However, it is too serious a subject to be ignored. Conversations about passing down wealth should be tackled early, so everyone in the family is clear how much will be left. This allows all parties to plan and, despite the sensitive nature of the subject, delivers great peace of mind.
 
“Financial advisers can help support this process. They will very often know members of the same family and will have an understanding of family finances. In many cases, financial advisers can provide an objective, third party view as to how wealth should be passed down and managed. This is not only reassuring, but can ensure money is managed more successfully through the generations.” 

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