Children of the “Baby Boomer” generation are set to inherit £100,000 each on average, analysis shows, although they will not receive the money until they are in their 60s.
On average people currently aged 55-64 have built up wealth of a quarter of a million pounds, the vast majority of which they are unlikely to spend, a report published today by the Institute of Fiscal Studies says.
The conclusion, which was reached by analyzing 15 years of pensioners’ saving and spending habits, dispels fears that younger generations’ inheritance is likely to be squandered by their parents or eaten up in care fees.
The news is likely to come as a relief to younger generations, who are suffering from a cocktail of economic misfortunes including high student loan repayments, low wages, high housing costs and relatively poor pension provision.
The IFS said that the median non-pension wealth owned by households on the cusp of retirement was £250,000. Most of this was made up of housing wealth, with a small proportion in savings and investments.
It said baby boomers were unlikely to spend the vast majority of this sum, meaning it would be eventually be bequeathed. Based on each household splitting the sum between two children, each child would receive over £100,000 free of inheritance tax.