In the past, the contents of someone’s estate was most likely to go to their children first, and other family members and friends second. A recent study by pension firm Royal London now shows that as much as £400 billion is set to skip a generation, and pass from grandparents to grandchildren instead.
Either this, or children are receiving inheritances from their parents, but are immediately passing it on to their children as they are seen to need it more (and it is often used for mortgage deposits, for example). The ‘sandwich’ generation of people between 45 and 64 are often relinquishing their claim to any inheritance, even if the grandchildren are not explicitly mentioned within the will.
But the amount of money left behind is decreasing as well. This is because grandparents are giving their children and grandchildren the money they need while they are still alive, thus reducing any inheritance left over.
The majority of Britain’s homes are owned by the older generation, with the younger generations renting from them. If the country is to re-establish its housing market, then these gifts or inheritances from grandparents could be the way to do it. The figures at the moment shows that 45 percent of ‘babyboomers’ (people born in the 50s and 60s) owned their own home by the time they were 25. In contrast, only 25 percent of ‘millennials’ (people born in the 80s and after) owned their own home by the same age.