HL’s research shows that one in five people is expecting to inherit a hefty sum, and that two-thirds of those people actually need the money to fund, or help to fund, their retirement. The reality is that many people don’t inherit the amount they are expecting. In fact, between 2014 and 2016 the average amount that people inherited was only £11,000. Included in this, those aged 55 to 64 inherited £33,000 on average, and those aged over 65 inherited £20,000 on average.
At what age are you likely to receive your inheritance?
If you are currently between 20 and 35 years old, the average age at which you are likely to receive your inheritance, if you are expecting one, is 61. This would be in time for it to contribute to your own retirement if that is what you are hoping for. However, people are living a lot longer now, so it is quite likely you will be older when you receive any inheritance. How many of us have parents over 90 years old, for example? According to the Office for National Statistics (ONS), in 2018, there were over half a million people living in the UK aged over 90 and over 13,000 people aged over 100. This means that quite a few people will not be inheriting from their parents until they are well into their own retirement.
Care costs might reduce the amount you inherit
The cost of care has increased significantly over the last few years, with some people paying over £1,000 a week. This will eat into anyone’s assets – often meaning that property that was to be left to family has to be sold – and so the amount to be left to beneficiaries is reduced. It is almost impossible for a person to predict that they are going to need to pay for care in their older years, so, even if they think they will be leaving a substantial sum to family, that can change.
All in all, relying on an inheritance to see you through your own retirement years is never a good idea – you might even be expecting one that is not actually planned, or is thwarted because the person dies intestate and you are not a beneficiary based on intestacy laws. It is probably best to discuss inheritance issues with your family so that you all have an idea of what is likely to happen with the assets of a loved one when they die – and make your future plans accordingly.
If you wish to discuss anything relating to wills, estate planning, trusts or residential care planning, contact our experts now. We are all working safely and remotely and will be happy to discuss your issues on the telephone or by email or video call. You can also find out much more on our web pages.
Author: Anne Rogers, partner and head of the private client department.