Retiring Brits are more inclined to squander potential inheritance
As retirement funding moves up the financial agenda for many Brits and rising house prices drag more estates into the inheritance tax net, two thirds of people are planning to spend their bricks and mortar in retirement and leave less to their heirs, according to our latest research.
- Two thirds of Britons will use the family fund retirement.
- £112,000 cash release on average to supplement pension.
- Older people far less willing to leave inheritance than younger people.
52% of people are planning to trade down the housing ladder to release some of the equity locked up in their homes when they retire. 6% plan to stay in their own home but want to use an equity release product to supplement their income. A further 7% would sell up and use the proceeds to fund life in a modern retirement community. Just 1% will look forward to life in an old people's home. Many would like to retire to sunny climates too - 34% of respondents want to emigrate after receiving their carriage clock from work.
On average, retirees want to retirees want to release £112,000 of equity by trading down the housing ladder. This could provide an additional annual income £8,000*, twice the single person's basic state pension.
Particularly startling findings reveal that the older we grown the less willing we are to leave an inheritance for those who follow us. The survey asked people specifically how important leaving a good inheritance is to them. While 85% of 18-20 year olds said that it was a very high priority for them to leave an inheritance to their family, a mere 29% of pensioners say that providing for their heirs was very important. Warren Bright, Cheif Executive of propertyfinder.com explains:
For young people, old age is a pretty abstract concept. The figures are more reflective of their hope of receiving an inheritance than a real intention to leave one. What's more, young people don't realise today's pensioners are not willing to sit around waiting to die. They are out enjoying life - and that needs to be paid for!
Older people may feel they have already done their bit - giving their children a financial leg up onto the property ladder by helping them buy their first home. In any case, by the time people retire their children are usually well established. Older people want to use their assets to enjoy their retirement and with a rising life expectancy, they need to plan for the long-term. Bright continues.
The prospect of the Chancellor taking a bite out of their hard-earned money when they die only adds to the desire to enjoy some of it while they can. You can't avoid death or taxes, but you can have fun trying.
