Inflation is a worry for two in five older people who plan to pass on £50,000 or more in wealth to loved ones in their lifetime, according to new research.
On average 55 to 85 year olds expect to transfer £192,000, a quarter of their overall household wealth.
The research has been carried out for wealth manager St James’s Place.
It showed that a third of adults aged 55 to 85 with £50,000 or more in investable assets plan to transfer to their children or stepchildren, 7% to their grandchildren, and 8% to another family member.
However, in the current economic turmoil almost two thirds are concerned rising inflation will impact or erode the amount of wealth they can pass on.
Claire Trott, divisional director for retirement and holistic planning at St James’s Place, said: “The great wealth transfer is widely anticipated, with younger generations expected to receive substantial lump sums over the next few years as baby boomers look to pass on their wealth.
“However, it’s clearly a difficult financial environment at present, and this is impacting most of society. This includes those aiming to transfer wealth, with many concerned about how the inflationary backdrop will affect their plans.”
She pointed out that other issues such as living for longer and the prospect of funding care in later life have become much more prevalent, and will need to be factored into plans too.
However, despite the tough market conditions of the past few years, 44% of those intending to pass wealth on said the amount they planned to transfer to a loved one has increased.
Only 11% said it’s decreased, while 42% said it has not changed.
Among those who’ve increased the funds they’ll pass on, two-fifths said this is because their investments performed better than expected, while a fifth attributed it to receiving financial advice which helped maximise the amount they could pass on.
The research was conducted for St James’s Place by Opinium, between 13 and 26 January 2023, among 1,000 UK adults aged 55-85 with £50,000 or more in investable assets, and among 1,000 UK adults aged 18-70 who expect to receive a gift/inheritance in next five years.
