Younger people are likely to inherit more wealth than their predecessors in previous generations in both absolute and relative terms, according to research by the Institute for Fiscal Studies (IFS).
Of those born in the 1970s, 75% have either received or are expected to receive an inheritance from an elderly member, compared with 60% born in the 1950s and 40% born in the 1930s.
Among the younger generation, those with a higher income are more likely to expect to receive an inheritance.
90% of young adults with higher incomes have received or are expected to receive an inheritance, compared with 60% on lower incomes.
- over half of younger people who have received an inheritance totalling more than £250,000 are in the top 20% of lifetime incomes
- between 2002/03 and 2012/13, household wealth of the elderly increased by 45%
- 72% of those households now expect to leave an inheritance, up from 60% a decade ago.
Andrew Hood, senior research economist at IFS, said:
“Today’s elderly have much more wealth to leave to their children than their predecessors did, primarily as the result of higher homeownership rates and rising house prices.
“At the same time, today’s young adults will find it harder to accumulate wealth of their own than previous generations did, due to the sharp fall in homeownership for that group, the dramatic decline of defined benefit pensions in the private sector and the stagnation in their incomes.”