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

Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
Tottenham legend Jimmy Greaves has defended fans use of the word 'Yid'
Arts and Entertainment
Kanye West, performing in New York last week, has been the subject of controversy as rock's traditional headline slot at Glastonbury is lost once again
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Claims Administrator

    £16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

    Recruitment Genius: Senior SEO Executive

    £24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

    Recruitment Genius: Online Customer Service Administrator

    £16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

    Recruitment Genius: Digital Marketing Executive

    £18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

    Day In a Page

    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

    Everyone is talking about The Trews

    Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living