Most people plan to spend children's inheritance

Young couples hoping for an inheritance to lift them on to the first rung of the property ladder have been dealt a blow by research showing that most adults plan to spend their spare cash on themselves, rather than save it for their children.

The survey of more than 2,000 people by the Joseph Rowntree Foundation found that only a quarter of those with the potential to make a bequest said they would budget to leave something for their heirs.

While most people said they would to be able to leave a legacy, half of them strongly agreed that older people should enjoy their retirement and not worry about an inheritance.

Even among those in their eighties, a majority said they would enjoy life, with just a third agreeing they needed to be careful with their money to ensure they left an inheritance.

The family home - once seen as the centrepiece of any will - is no longer immune. Most of those who held a view said they would consider borrowing against their home to release extra money to fund their later years.

The research will be seen as evidence that increasing longevity and a series of crises over pensions have made the older generation more concerned about their finances after retirement.

It also bolsters the view within the advertising industry that the "grey pound" is increasingly important for consumer and leisure businesses.

Karen Rowlingson, joint author of the report and a senior lecturer in social policy at the University of Bath, said: "Although most people would like to be able to make bequests when they die, they are also willing to use up their savings and housing equity if they need the money to maintain a reasonable standard of living. It does not support the stereotype of older people being excessively frugal in order to bequeath everything to their children."

However, she said the research did not endorse the recent image of the older generation - dubbed SKIers or "spending the kids' inheritance" - splashing out on luxuries. Instead it showed that people were planning to draw on their assets over their lifetime as part of a planned process of managing their resources.

"Instead of speculating about SKIers, it is time we started recognising that most older people manage their assets in a balanced way," Dr Rowlingson said.

She said the group of people emerging from the research could be dubbed Owls - older people withdrawing loot sensibly. The survey found the main reasons for releasing equity were to fund repairs and improvements, pay bills or debts, or buy essential items, with very few doing it to pay for luxuries.

The trend has been picked up among the younger generation. More than half felt they were not very likely to receive property as an inheritance.

Less than half of the adults interviewed had made a will, but those aged over 80 were more prudent, with 84 per cent making legal provision. One in four homeowners had not made a will.

The authors, Dr Rowlingson and Stephen McKay of Bristol University, believe poor knowledge of inheritance tax rules could be a reason. Just one in a 100 of those questioned was able to answer correctly a series of questions about the regime.

More than half did not know that the exemption from inheritance tax enjoyed by married people does not apply to cohabiting couples.

Pamela Hawker: 'They don't need my money to be secure'

By Michael Connellan

Pamela Hawker, 50, says she is not concerned about leaving a cash-pot for the children she loves. "They simply don't need an inheritance to be safe and secure."

Mrs Hawker, who lives in Great Shelford near Cambridge, has three children between 16 and 23 with her husband, Brian.

"We've never had savings," she said. "My father was part of the thrifty generation, but those frugal habits are more or less non-existent now."

Mrs Hawker joked about what she calls "King Lear syndrome", explaining: "It's not healthy for kids to know they're going to inherit large sums - it means they're waiting for their parents to pop their clogs." She added: "We've spent £20,000 on putting our first two children through education - these days the inheritance is received while the parents are still alive and kicking."

Her children shouldn't be alarmed: "They should at least be able to divide the house between them. That's unless we decide to be truly reckless."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Digital Optimisation Executive - Marketing

    £30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

    Recruitment Genius: Financial Reporting Manager

    £70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

    Recruitment Genius: Payments Operations Assistant

    £23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

    Recruitment Genius: Telephone Debt Negotiator

    £13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

    Day In a Page

    On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

    On your feet!

    Spending half the day standing 'reduces risk of heart attacks and cancer'
    Liverpool close in on Milner signing

    Liverpool close in on Milner signing

    Reds baulk at Christian Benteke £32.5m release clause
    With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

    The big NHS question

    Why are there so few new GPs when so many want to study medicine?
    Big knickers are back: Thongs ain't what they used to be

    Thongs ain't what they used to be

    Big knickers are back
    Thurston Moore interview

    Thurston Moore interview

    On living in London, Sonic Youth and musical memoirs
    In full bloom

    In full bloom

    Floral print womenswear
    From leading man to Elephant Man, Bradley Cooper is terrific

    From leading man to Elephant Man

    Bradley Cooper is terrific
    In this the person to restore our trust in the banks?

    In this the person to restore our trust in the banks?

    Dame Colette Bowe - interview
    When do the creative juices dry up?

    When do the creative juices dry up?

    David Lodge thinks he knows
    The 'Cher moment' happening across fashion just now

    Fashion's Cher moment

    Ageing beauty will always be more classy than all that booty
    Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

    Health fears over school cancer jab

    Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
    Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

    'I forgive everyone, but I don't forget'

    Fifa president Sepp Blatter issues defiant warning to opponents
    Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

    Weather warning

    Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
    LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

    High hopes for LSD

    Meet the volunteer users helping to see if it cures depression and addiction
    German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

    Saving Private Brandt

    A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral