Younger generation set to enjoy 'inheritance boom', report predicts
Younger people will enjoy the biggest "inheritance boom" of any post-war generation, but it will be too late to solve the housing crisis and wealth inequality woes, according to a new report.
The Resolution Foundation said wealth accumulated by older people would benefit younger generations in years to come.
The think tank said inheritances would double over the next 20 years as so-called baby boomers - born between 1946 and 1965 - became older.
Future intergenerational transfers look set to vastly increase absolute wealth gaps between millennials. 20-35 year olds with property wealth of their own of £200,000 or more have average parental property wealth more than twice that of those with no parental property wealth. pic.twitter.com/FGLInt7k1g
-- ResolutionFoundation (@resfoundation) December 30, 2017
Almost two thirds of people aged 20 to 35 have parents who own property, which they might expect to get a share of in the future, said the report.
By contrast, fewer than two in five adults born in the 1930s received an inheritance.
The Foundation said so-called millennials, born between 1981 and 2000, who are yet to get on the housing ladder, are less likely to have property passed on to them.
Even for millennials who can expect an inheritance, this may happen far too late to help them on to the housing ladder, and may be more use for grandchildren's home ownership, it was claimed.
Based on their parents' life expectancies, the Foundation estimated that the most common age at which millennials inherit would be 61.
Nearly half of millennials who don't own homes have non-home owning parents. And even for those who do have parental property wealth, inheritances are likely to come too late to support living standards during the expensive family-raising stage of lives. pic.twitter.com/CRuMWqmMgN
-- ResolutionFoundation (@resfoundation) December 30, 2017
Laura Gardiner, senior policy analyst at the Resolution Foundation, said: "Older generations have benefited hugely from the big increases in household wealth in Britain over recent decades.
"While the millennials have done far less well in accumulating their own assets, they are likely to benefit from an inheritance boom in the decades ahead.
"This is likely to be very welcome news for those millennials, including some from poorer backgrounds, who in the past would have been unlikely to receive bequests. They have the good fortune to benefit from the luck of the baby boomer generation.
Parental home ownership rises with the personal incomes of millennials. However, more than half of the lowest-income fifth of 20-35 year olds might expect to get a share of a parent's property one day. pic.twitter.com/WfJJcs6luw
-- ResolutionFoundation (@resfoundation) December 30, 2017
"But inheritance is not the silver bullet that will get a whole new generation on the housing ladder or address growing wealth gaps in society.
"Even for those millennials who will receive a bequest, it's unlikely to come when they're coupling up, having children, and trying to buy a family home when the extra wealth would be much needed, but as they approach retirement instead."
