After a decade of a Labour government pledged to reduce inequality of opportunity, the rich are still getting richer, courtesy of the soaring value of their inheritances.
The average British inherited estate has doubled in value in less than a decade. A report by the International Longevity Centre (ILC) says that estates bequeathed to family members have risen from an average of £21,000 in 1997 to around £44,000 in 2004, the latest year for which there are figures.
However, the value of inheritances going to the richest sections of the population have risen much more rapidly than the average. The ILC research shows that the average inheritance left to the professional and managerial classes rose from £24,000 to £40,000, compared to a much smaller increase – from £13,000 to £16,000 – for the lowest social groups.
Expectations of the size of inheritance drift down after parents and grandparents reach their 70s, with lower owner-occupier rates and the impact of the cost of care eating into savings and forcing some to sell the family home.
The data covers principal beneficiaries of a close relative's estate and the more modest sums often left to grandchildren and more distant relatives. The rise closely follows the near trebling of house prices in the period.
Around 3 per cent of those in the professional and managerial group of the population received an inheritance over a year, against 1.5 per cent for unskilled and manual workers.
Looking to the future, some 27 per cent of people in their 50s expect to receive an inheritance totalling £10,000 or more and 10 per cent expect a windfall in excess of £100,000.
The research confirms that rising property values have pushed more people into the inheritance tax brackets, but also highlights the much more paltry sums inherited by the great bulk of the population – under £50,000 on average. In his last Budget the inheritance tax threshold was effectively doubled by the Chancellor, Alistair Darling, to about £620,000. The Conservatives have proposed raising the threshold to £1m.
The message is clear: the less you have, the less likely you are to inherit a fortune. Only 12 per cent of those in the poorest sections of the population expect an inheritance of any value, against 22 per cent for the population as a whole.Reuse content