‘Sandwich generation’ will inherit £50,000 less than the previous one

‘Sandwich generation’ will inherit £50,000 less than the previous one

Children whose parents are nearing retirement can expect to inherit £50,000 less than their older counterparts. They will lose out as the so-called 's

DAILY MAIL COMMENT: Voters are appalled by fractious in-fighting in the Tory Party
New York Times publisher savages Trump for calling his paper ‘treasonous’
Shocking footage shows the seconds before the Shoreham air crash

Children whose parents are nearing retirement can expect to inherit £50,000 less than their older counterparts.

They will lose out as the so-called ‘sandwich generation’ face pressure to financially support both their offspring and their own parents, a report said.

Couples might have to pay for care for grandparents, assist their children through university, help them later to pay for childcare and then also save for their own future care needs.

The family costs all chip away at retirement savings, according to research from the St James’s Place wealth management group.

Children whose parents are nearing retirement can expect to inherit £50,000 less than their older counterparts. File image

Children whose parents are nearing retirement can expect to inherit £50,000 less than their older counterparts. File image

Children whose parents are nearing retirement can expect to inherit £50,000 less than their older counterparts. File image

Its report said: ‘For those with a sufficient amount of wealth, the amount they expect to pass on is likely to be significantly impacted, with future retirees expecting to pass on £50,606 less of their retirement pot on average compared with current retirees.’

Current pensioners have an average of just over £260,000 in retirement funds and can expect to leave around £125,000 to their children. But St James’s expects this to shrink to £235,000 – with only £74,000 to pass on.

Official figures suggest that 624,000 families have two generations of retirees, nearly double the number 20 years ago. 

This total is expected to almost double again to 1.2million over the next two decades.

A survey carried out for St James’s by Opinium found that 24 per cent of those approaching retirement expect to have to support children, grandchildren or a former partner or spouse and their children. Only around 7 per cent of current retirees face such responsibilities.

The report said around one in six help other generations of their family with living costs and one in seven help with university costs or childcare.

Claire Trott of St James’s said: ‘Passing wealth on to our loved ones is one of the final acts of kindness we are able to make, so it is concerning that the amount many believe they will be able to pass on is eroding.

‘With people living longer, the make-up of today’s modern family changing, and retirement provision more and more the responsibility of the individual, the way we need to think about planning for the future has fundamentally shifted.’

An official review concluded last week that inheritance tax should be reformed so that more of a family’s wealth can be passed to children without paying the levy. 

The Office of Tax Simplification called for the seven-year rule on gifts to be eased and for an overhaul of restrictions on passing on cash and property.

COMMENTS

WORDPRESS: 0
DISQUS: 0