More than three in 10 investors (31%) with adult children are planning on giving them a living inheritance this year, according to a poll by interactive investor.

The investment platform’s findings indicated that one in five of these people are planning to give a significant £50,000 or more.

interactive investor has estimated that the wealth transfer from older adult investors that could take place in a single year is more than £12bn.

The study, based on responses from 2,046 investors, indicated that 39% said they would gift between £1,000 and £10,000, while 18% said they would gift between £10,000 and £20,000. Most of the recipients are under the age of 50, according to the poll, with 60% under the age of 35.

“For those who have done well out of the housing and stock markets over the years and who have adult children who could do with a helping hand now, giving while living is eminently sensible,” said interactive investor head of pensions and savings, Becky O’Connor.

“A third of people with adult children who answered our poll are planning on giving living inheritances this year. These are not small sums of money either, with one in five hoping to gift more than £50,000.”

A previous poll for interactive investor from 2020 found that 28% of parents who had gifted money to adult children had paid into a savings account for them, while 23% had paid into an ISA and 10% had opted for the longest-term gift of a pension contribution.

interactive investor noted there are additional tax benefits to “giving while living” if an estate could be liable for inheritance tax.

“Even if your adult children don’t need the money right now for anything specifically, it might make sense for you to give now rather than later,” O’Connor added. “In which case, setting them up with a stocks and shares ISA or a pension contribution can be a fantastic long-term financial gift, for which they will be thanking you for many years to come.

“It’s important to note, though, that not all people over the age of 60 are awash with cash to give away. Policymakers looking at the difficulties facing younger generations who are trying to accumulate wealth must be careful not to assume that all younger adults are in line for massive windfalls.

“Some look set for a bit of luck, but others continue to plough on with no inheritance or expectation of any. For this group, building up as much as possible by way of investments and pensions on their own will be the best option, albeit a far slower burn.”

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