According to a recent report from insurer Aviva, around a quarter of Britons approaching retirement age do not plan to leave an inheritance as they focus instead on covering living costs and providing immediate financial support to family members.
The spring edition of Aviva's Real Retirement report reveals that among over 55s, only 7% consider leaving inheritance as their primary goal in retirement. It's more of a priority when people reach 65 and the percentage of people prioritising leaving money or property to those they love increases to 18% among people aged 85 and over.
Aviva also found that 25% of over 75s choose to provide a cash loan to family members while they are still alive rather them leave it as part of their estate on their death. More than a fifth of over 55s have also given a cash loan to relatives instead of providing an inheritance, with 8% of them admitting they regularly give money to their family in order to avoid Inheritance Tax.
Although many don't have plans to leave an inheritance, Britons, especially those aged over 55, undertake a broad range of measures in order to pass on wealth to their loved ones. For instance, 18% of people in this age group always look for the best deal when shopping, especially when doing the weekly food shop, in an attempt to maximise their available wealth. Some 12% would downsize or move to a less expensive home and 11% would cut down on holidays abroad, Aviva said.
Despite current economic pressures, many over 55s are confident they will pass on more than their parents did before them. Property has emerged as an essential component of Britons' inheritance plans. Some 65% of those aged over 55 plan to leave behind their family home, although just 34% inherited a home from their parents.
Under 55s are the least optimisitc about leaving an inheritance, which means that careful estate planning becomes significantly more important here. This is also true for retirees who are mindful of ever-rising living costs and the possible need to pay for care in later life.