Are you planning to leave an inheritance, or perhaps you're expecting to receive one yourself in the next few years? Well, if research from HSBC is anything to go by, things may not pan out that way, as it looks as though the traditional inheritance may be dying out.
HSBC's report found that, even though 58% of working-age people expect to leave an inheritance to their children, the reality could be different, with only 33% having actually received one.
Instead, there's a clear shift towards a 'living inheritance': the study found that 50% of retirees provide regular financial support to their loved ones, while wealth is being passed down the generations earlier than traditionally expected, with 19% regularly giving to grown-up children and 9% doing the same for grandchildren.
Unfortunately, giving while living can come at a cost, and it's people's retirement dreams that could suffer. The living inheritance is a concern for 22% of retirees who are worried about being able to offer the necessary financial support, while 18% are worried about being reliant on loved ones. A further 53% have been unable to realise at least one of their retirement dreams, which could well be a consequence of giving while living.
"This report shows that withdrawals from the bank of Mum and Dad may actually be affecting the standard of living of many retirees," said Caroline Connellan, head of Wealth at HSBC UK. "New pension freedoms have made savings more accessible, but people should carefully consider the right balance between helping their family and making sure they have sufficient income through retirement."
The figures also revealed that anyone expecting to receive a proper inheritance could be disappointed, with 26% of working-age people saying that it's better to spend all your money and create your own wealth, leaving nothing for future generations. Just 5% think it's best to save as much as possible to pass on at a later date.
This is despite the fact that 54% of those who expect to receive an inheritance in the future think it will help fund their retirement, while 15% say it will completely or largely fund it, so these people could well come in for a shock.
"Working-age people shouldn't pin their hopes on funding retirement with an inheritance," added Caroline. "It's more important than ever that people of all ages make plans about how they'll fund their retirement, so they can live the lifestyle they want."
"Even the smallest amount saved today can contribute towards the lifestyle you want in retirement and the legacy you hope to leave. Those who fail to plan may find that any kind of inheritance is not only unlikely, but also that a comfortable retirement is beyond reach."
Compare savings accounts to build up your retirement pot
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.