90% of people reliant on inheritance
The latest research into inheritance has uncovered that 9 in 10 adults are reliant on inheritance to fund retirement and pay off debts.
1 in 5 would use inheritance monies to pay off their mortgage, 16% need inheritance to supplement retirement income with a combined 19% intending to pay off credit cards and personal debt.
The research, conducted by Tower Street Finance, has shown that there is a great willingness to want to leave an inheritance to loved ones, but that there are still huge swathes of the population without a will, or an understanding of the rules of inheritance and intestacy. 84% of UK adults plan to leave an inheritance, but only 54% have a will. Most people have no real understanding of how probate works, or how long the process can take. And that there was very little understanding about inheritance tax and who is liable to pay it before an estate can be distributed. Only 14% knew that the executor or personal representative (when there is no will) is responsible, and a further 27% wrongly believe that any inheritance tax liabilities can be settled once Probate is Granted.
The research also highlights the growing risk for cohabiting couples, which according to the Office of National Statistics are now the second fastest growing type of households in the UK, do not have any rights under intestacy.
The growing number of blended families (families with children from previous marriages) contributes to half of UK step-parents denying their step-children a fair share, or any entitlement, of the inheritance. 32% of step-parents have a will which does not treat
their children and step-children equally, while 17% of step-parents admitted they had excluded step-children from their wills altogether
The report, which examines property prices now and in the future, shows that more and more estates will be liable for IHT, especially in London, the South East and the East of England. This will especially impact the increasing number of people who will not be downsizing their property in later life as they remain attached to their communities, with outdoor space also a priority.
The findings come against the backdrop of recent research which identify an increasingly ageing working population unable to retire because of living costs post-retirement. Commenting on the report Tower Street Finance’s director, Dicky Davies says:
“The findings of our report gave us a real view into people’s knowledge and expectations. This, in conjunction with in-depth conversations we’ve had with estate professionals, has given us valuable insight to allow us to develop our products around the real needs of consumers going through this difficult time.
“Our research also showed that 50% of people expected their solicitors to have knowledge of and recommend products which could help them get hold of their funds before waiting for probate to complete.”
The full report is available here: https://towerstreetfinance.co.uk/wp-content/uploads/2021/08/5292-The-%E2%80%98I-Word-V.1.pdf