Children of the “baby boomer” generation, those born between 1946 and 1964, are set to inherit £100,000 each on average, although they will not receive the money until they are in their 60s.
Analysis by the Institute of Fiscal Studies (IFS) shows that on average people currently aged 55 to 64 have built up wealth of £250,000, the vast majority of which they are unlikely to spend. Most of this is made up of housing wealth, with a small proportion in savings and investments.
Writing for the Times*, Paul Johnson, Director of the IFS, says the government and the financial services industry “urgently need to make sure that we have a set of policies and products, in pensions, housing and social care, which allows people to manage their assets sensibly.”
Whilst the news is likely to come as a relief to younger generations who are struggling in a sea of high student loan repayments, low wages, high housing costs and relatively poor pension provision, due to complicated tax rules many families could possibly be inheriting less than they are entitled to.
Through careful planning inheritance tax can be mitigated. Our Beavis Morgan tax experts are available to guide you and advise on the available strategies.