One in six under 35s are relying on inheritance to cover living costs
16% also reliant on inheriting money to pay off debts or get onto the property ladder
- Four times as many Brits would use money inherited in the next year to cover living costs than in 2020 (29% versus 7%).
- The majority of under 35s (58%) assume they’ll receive an inheritance from their parents, and 25% expect to receive money from one or more of their grandparents when they pass away too.
- However, 10% of over 45s say they no longer expect to be able to leave any money to loved ones when they pass away during to rising living costs.
- Further information from Tower Street Finance’s Inheritance Index report can be found at: https://towerstreetfinance.co.uk/the-inheritance-index/
Rising living costs mean that one in six (16%) UK adults aged 18-34 are now relying on receiving an inheritance in order to cover day-to-day expenses, and a further 17% are relying on inheritance cash to pay off debts, according to new research by the Probate Lending experts at Tower Street Finance.
High interest rates and property prices mean that one in six 18-34-year-olds are also reliant on inheriting money in order to get onto the property ladder.
The study explored attitudes to giving and receiving inheritance, comparing figures from a survey run in Autumn 2022 with one run in Autumn 2020 to see how expectations and intentions have changed.
In the latest survey more than four times as many Brits (29%) stated that if they inherited money in the next 12 months, they’d use it to cover living costs, versus only 7% who said the same in 2020.
Under 24s were the most likely to say this (38%), followed by 25-34-year-olds (30%).
One in five under 35s (21%) would also use inheritance received in the next year to pay off credit card debt, and 18% would use it to pay off personal loans.
Again, this was higher than when the same survey was run in 2020 when 13% of under 24s said they would use inheritance to pay off credit card debt, and 12% said they would use it to pay off loans.
The majority of under 35s (58%) stated that they assume they’ll receive an inheritance from their parents, and 25% expect to receive money from one or more of their grandparents when they pass away too.
However, 10% of over 45s say they no longer expect to be able to leave any money to loved ones when they pass away during to rising living costs.
Those who are fortunate enough to be listed as a Beneficiary in a Will, shouldn’t expect to receive their ‘windfall’ quickly either.
While experts advise that it currently takes 9-12 months before a Beneficiary will receive any money from an Estate, most Brits expect it to be quicker (taking 8.2 months) while half of under 24s (50%) and four in ten 25-34s (40%) thought it would take less like 6 months.
Dicky Davies, Business Development Director and co-founder at Tower Street Finance added:
“It’s clear from our research that many Brits – particularly those aged under 35 – are relying on receiving an inheritance to get by day-to-day, clear debts and even get on the property ladder.
“What is worrying is many are unaware of how long the Probate process takes, and the wait they could face to get their inheritance.
“We recognise how frustrating the Probate process can be and have developed a range of no-risk solutions to help people access their inheritance sooner.
“Parents or grandparents who can afford to give some inheritance in advance may want to consider this too. Inheritance Tax rules state that cash gifts made up to seven years before someone passes away are not liable for tax, meaning that children or grandchildren hoping to get onto the property ladder soon could get a financial helping hand much earlier.
“However, if a cash donation of £3,000 or more is made in the seven-year period before the individual passes away, then inheritance tax (also known as IHT) may need to be paid. There are various levels of tax depending on the number of years between the donation and the death, and the Estate value. It’s worth speaking to a Probate Solicitor to discuss your options.”
For further information about this research please visit: https://towerstreetfinance.co.uk/the-inheritance-index/.