New research from Barclays has suggested nearly a third of millennials are willing to forgo their inheritance to see their parents focus on funding a comfortable retirement.
Their study of 4,000 40-year-old millennials in the UK found that, while 99% of parents intend on passing an inheritance onto their children or grandchildren, some 36% are specifically concerned about funding the cost of care.
This forms part of the 32% millennials’ feeling that they’d rather their parents focused on their own retirement. Alongside this, 31% of the parents of millennials are worried about supporting their own immediate living costs, and 19% are considering downsizing.
Despite this, 37% of the millennials’ parents intend on gifting even more money this year to help their children with the rising cost of living.
“Many people want to do what they can to ensure they maximise the amount they leave to their family and minimise inheritance tax, but working out how much you can afford to give away during your lifetime isn’t easy,” said Clare Francis, Director of Savings and Investments at Barclays Wealth.
Barclays said the desire from each generation to financially support the other comes against the backdrop of financial challenges on two fronts: continued market volatility impacting pension pots and property prices on the one hand; and rising living costs on the other.
Yet, the communication around inheritance plans remains imperfect: 38% of parents do not speak to their children around inheritance plans, and one in four have not developed a plan to protect their child’s inheritance should their child go through a difficult divorce. Francis added:
“Even though most children would be very grateful if their parents are able to pass on some inheritance while they’re still alive, they wouldn’t want them to have money worries in the future as a result. This is why it’s not only important to plan, but also to include […] family in any conversations – it can make such a difference and help remove some of the pressure many parents feel when thinking about how and when they’ll pass on their wealth.”
