Rising living costs are not only impacting the quality of life experienced by millions of people at the moment, but new research has revealed that they’re also set to significantly impact the financial legacy that many hope to leave behind when they pass away.
According to new research, which polled 2,000 adults, by the Probate Lending experts at Tower Street Finance, higher day-to-day food, housing, and energy bills are expected to mean that one in 10 UK adults will be left with nothing – no money or other valuables – to pass on to their loved ones after they die.
While 72% do still expect to leave some inheritance to Beneficiaries, three in five anticipate that the current cost of living crisis will “unquestionably” reduce the value of their Estate.
On average, the estimated total value of an Estate has dropped by 23.5% in the last two years from £289k in 2020 to £221k in 2022 according to the study, which compared new survey responses with those from two years ago.
Lower Estate values are likely to be particularly worrying for those who are banking on receiving inheritance to get by.
29% said that if they inherited money in the next 12 months, they’d use it to cover living costs – over four times as many as in 2020.
8% admitted they are relying on receiving an inheritance (at some point) to cover their living costs, and 9% are depending on receiving an inheritance to pay off debts.
One in six (17%) 18-24-year-olds and 15% of 24-35-year-olds are also relying on inheriting money to get on the property ladder.
But even those who are fortunate enough to be listed as a Beneficiary in a Will shouldn’t expect to receive their “windfall” quickly. While experts advise that it currently takes 9-12 months before a Beneficiary will receive any money from an Estate, the average Brit expects that it takes less time – around eight months. One a third (36%) thought it would take less than six months.
Anyone named as the Executor of a Will is also likely to face the additional financial burden of paying for the funeral of their loved one.
At this time, just four in ten (41%) UK adults said they would have enough money to hand to pay for a funeral if needed (based on the average 2022 cost of £4,927). A third (33%) wouldn’t be able to cover the cost of this.
Of those who couldn’t afford to pay for funeral costs, a third (35%) have no idea how or where they’d find the money, while 15% would borrow from relatives, and 14% would take out a loan.
Dicky Davies, Founder and Business Development Director at Tower Street Finance added:
“It’s clear from our research that the current cost of living crisis isn’t just having an impact on the present day, but it’s also likely to have far-reaching impacts into the future.
What is particularly worrying is just how many people are depending on receiving money from an inheritance to get by day-to-day. Not only does our survey indicate that Estate values are dropping due to rising living costs, and therefore Beneficiaries should expect to receive less, but there is also the added issue of the Probate process taking time.
We recognise how frustrating the Probate process can be and have developed a range of no-risk solutions to help people access their inheritance sooner.”
For further information about this research please visit: https://towerstreetfinance.co.uk/the-inheritance-index/.
This article was submitted to be published by Tower Street Finance as part of their advertising agreement with Today’s Wills and Probate. The views expressed in this article are those of the submitter and not those of Today’s Wills and Probate.
