£293bn in wealth earmarked for younger generations

More than £293bn is currently earmarked by parents and grandparents to pass down to younger generations, according to research from The Openwork Partnership.

A nationwide study by the financial advice firm has revealed that children and grandchildren can expect an average early inheritance of nearly £9,500 each, with 60% of parents and grandparents planning to give gifts for major purchases before they die.

The findings suggested that one in nine (11%) of parents and grandparents are planning to give more than £25,000 each. However, not all children and grandchildren can bank on an early inheritance with 27% of parents and grandparents – the equivalent of 8.5 million – not planning to give anything.

The Openwork Partnership suggested the financial impact of the coronavirus pandemic has not damaged early inheritance plans too much, with just 6% of parents and grandparents worried they may have to cancel their plans.

Furthermore, 22% of parents and grandparents indicated they plan to give more or give the money earlier as a result of the pandemic, while 18% revealed they have cut the amount of the planned pay-out or will delay the gift.

“The sheer size of the amount that parents and grandparents plan to give as early inheritances shows how important intergenerational wealth transfers are in the economy,” commented The Openwork Partnership chief commercial officer, Mike Morrow.

“Average gifts per child or grandchild of nearly £9,500 are significant and £293bn makes a major contribution to the wealth of younger generations.

“The size of the gifts underlines the need for trusted advice on how best to use the money whether it is to pay for house deposits or pay off debt or to invest for the future. Parents and grandparents as well as children and grandchildren would benefit from an ongoing relationship with a financial adviser.”

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