There is a “strong case for improving public understanding of estate planning” as new research shows most working adults are relying on inheritance for future financial security.
In a survey of of 2,000 people aged 25 and over in England and Wales who work full-time or part-time, 49% of respondents said they expected inheritance to be important to their long-term financial stability This number increased to 72% for respondents earning over £100,000.
The research, commissioned by law firm Birketts found over half (53%) of respondents were confident they will receive an inheritance in the future.
Despite importance being placed on inheritance in long-term plans, the research found “significant gaps” in understanding around wills.
Nine in ten (90%) respondents said they believed marriage does not automatically cancel or override an existing will, while over a quarter (27%) revealed they thought closest relatives automatically inherit everything without a will.
Bernadette Baker, partner and head of private client at Birketts, said the findings show not only the importance of inheritance to long-term financial plans, but how many “hold misconceptions about what happens when someone dies without a will”.
Common misconceptions also included children being guaranteed a share of the estate (16%) and not understanding the extent to which a will all assets owned, including jointly owned property, pensions and life policies (62%).
Amongst those without a will (34% of respondents) women were more likely to not have a valid will than males, with 39% females not having a valid will as opposed to 31% males.
The proportion of people without a valid will varied “considerably” based on income too, with lower income earners less likely to have a will, and higher earners more likely to have a will. Reasons for not having a valid differed, with 21% of respondents saying they were prevented from drafting one due to costs and 33% saying nothing had prevented them. Almost one in five respondents said they did not have sufficient assets to justify a will, meanwhile 18% said they had not done so due to a “lack of understanding or knowledge”.
Baker added the survey demonstrated there was a “strong case for improving public understanding of estate planning and encouraging more people to put appropriate arrangements in place.”
