The next generation is a third less likely to pass down assets as a result of economic pressures, a new study has found.
Research by St James’s Place found even though 68 per cent of UK adults believed it was important to leave an inheritance, mortgage and rental costs posed significant challenges for future retirees.
It also revealed 13 per cent of those approaching retirement anticipated still having mortgage payments to make, compared to four per cent of current retirees.
Additionally, 16 per cent foresaw not owning a property in retirement and would continue to pay rent.
Claire Trott, divisional director for retirement and holistic planning at SJP, said: “The next generation of retirees are grappling with unique economic circumstances compared to their parents and grandparents.
“Homeownership is increasingly challenging, leading many to anticipate paying off mortgages and renting well into retirement. Additionally, supporting others financially in retirement is becoming more common.
"Overall, this means that fewer people think they’ll be able to pass on wealth or other assets to loved ones in an inheritance.”
The research also found 55 per cent of future retirees expect to provide financial support to other generations in their retirement, stretching their finances even further.
As a result, 26 per cent of future retirees admitted they didn’t feel confident they had the right inheritance plans in place compared to 14 per cent of current retirees.
While 65 per cent of current retirees expected to pass down property to their family through inheritance, this figure dropped to just 45 per cent among those yet to retire.
Similarly, cash savings are planned to be passed on by 60 per cent of current retirees, in comparison to only 40 per cent of future retirees who shared the same intention.
Trott added: "To secure a legacy for loved ones, it’s more important than ever to establish a robust financial plan early on.
"This will allow greater opportunity to build wealth over time, without making unnecessary sacrifices along the way and putting off retirement indefinitely."
alina.khan@ft.com
