New research from HSBC has found that ‘giving while living’ is on the increase, but this is often at the expense of dreams in retirement.
Their research found that traditional inheritance is dying out.
The report from HSBC, called The Future of Retirement Choices for later life, found whilst more than half (58%) of working-age people in the UK expect to leave an inheritance to their children, the reality is very different; only a third (33%) have actually received an inheritance.
A ‘living inheritance’ is instead becoming the new normal, with half of retirees surveyed providing regular financial support to their family and friends.
The report found that wealth is being typically passed down the generations, with 19% of retirees regularly giving to grown-up children, and almost one in ten (9%) doing the same for their grandchildren.
26% of working-age people said it is better to spend all your money and create your own wealth, while just 5% say that it’s better to save as much money as possible to pass onto the next generation, painting a bleak picture for a traditional inheritance.
We think these findings mean you should probably not pin your hopes of funding your retirement on the receipt of an inheritance in later life.
With people living for longer, and increasingly expensive costs of care, wealth is often depleted in later retirement leaving little to pass on to the next generation in the form of a traditional inheritance.
What all of this means is it is important to be realistic about inheritance expectations; open a dialogue with your parents when making retirement plans and do not rely on an inheritance to fund the lifestyle you want in later life.
Do speak to us if you are thinking about your life in retirement and the income you need to support your personal vision for later life.