According to a new study by the Institute for Fiscal Studies (IFS), as many as 10 per cent of UK adults born in the 1980s will receive inheritances worth up to half as much as an average person would earn in their lifetime.
The research shows that inheritances for people born in the 80s will be worth, on average, as much as 14 per cent of their overall lifetime earnings – a median inheritance of £136,000.
In comparison, a person born in the 1960s will typically receive an inheritance equal to eight per of their overall lifetime earnings – a median inheritance of £66,000.
The IFS report suggests that the wealth gained from an inheritance may become the “most important determinant of how well-off people will become.”
Of course, the IFS recognise that adults born in the 80s are earning less than those born 20 years earlier, at the same age.
It pointed out that due to this factor and larger inheritances, around one in 10 people born in the 1980s will inherit more than 52 per cent of average lifetime earnings.
The results of this study highlight the importance of estate planning when preparing a Will to ensure that families do not face a significant Inheritance Tax bill.
If you would like advice on preparing a Will in a tax-efficient manner, please speak to our team.