The traditional inheritance is becoming a thing of the past as more parents choose to give away assets during their lifetime, data from the Office for National Statistics (ONS) has suggested.
The UK’s ageing population, alongside rising living and care costs, is also diminishing assets which might traditionally have been passed on to others, it said.
Key statistics show that:
- 1.6 million adults (3.6 per cent of the population) received an inheritance of at least £1,000 between 2008/10
- Half of inheritors received less than £10,000; one in ten received £125,000 or more
- 88.4 per cent of inheritances comprised of money and savings
- Property formed 19.5 per cent of inheritances
- Personal possessions, such as jewellery and collectibles, were included in 12.4 per cent of inheritances.
Lifetime gifts are also increasing in popularity as people look for ways to reduce their inheritance tax (IHT) bill. Lifetime gifts, or ‘potentially exempt transfers’, are potentially exempt from IHT if they are made at least seven years before death.
IHT is currently due on assets – including anything held in trust and gifts made within seven years of death – valued at over £325,000.
Commenting on the ONS figures, Nigel Waterson, Chairman of the Equity Release Council, said: “For many of us, it is important that we leave something behind for our loved ones, but with the cost of living soaring and our savings dwindling rapidly, this is becoming increasingly difficult.”
“An increasing number of people are moving away from the idea of a traditional inheritance, instead giving money to younger family members to help them pay for university or get their foot on the property ladder.”