Young Brits fear inheritance debt bombshell

Gone are the days when mum and dad could bank on a family inheritance to clear the mortgage. New research from AA Legal Services reveals that seven in ten young Brits (70%) most fear inheriting a mountain of debt when their parents pass away.

The findings suggest that recent changes to inheritance tax hold little appeal for millions of young homeowners. At a time when young people are being offered up to six times their salary to get on the property ladder, many fear their elderly parents will spend their inheritance during their twilight years – instead, leaving them a legacy of debt when they die.

AA Legal Services commissioned a survey among 2,600 elderly parents and adult children to explore attitudes towards inheritance. The findings suggested a lack of communication is causing tension and division within the family unit.

What’s in the will?

More than four in five people under the age of 35 (86%) expressed concerns about what may emerge from their parent’s will. Beyond the prospect of having debts to pay, perhaps as a result of care costs or equity release schemes, around one in three were concerned about the prospect of sibling rivalry (31%) – fearing they wouldn’t get the same deal as their brothers and sisters.

Some of the children’s fears proved to be well founded. Money being left to a charity or to a step parent were actions that would irritate children (15% and 10% respectively) but were plans that parents had actually made.

In some instances, poor family communication is fanning the flames. Around three in ten parents over the age of 55 (28%) have not yet told their children about their will – and half of these have no intention of sharing the contents of their will before they die (14%).

Alarmingly, whilst most adult children worry about what they will or won’t inherit, few of them have actually made a will themselves. Only one in five couples with children under the age of 11 say they have made a will (20%).

James Molloy, Head of AA Legal Services says: “Recent concern over the cost of care homes, equity release schemes and growing consumer debt among the elderly are changing the way many young people view the concept of inheritance. As young families take on bigger and bigger debts to get a foot on the property ladder, few are banking on a future inheritance to help clear the mortgage.

“It is also alarming that so few young couples have made a will. On buying a home it should be one of the first tasks that is undertaken, but our research is telling us that writing a will is usually lost in the excitement of choosing new carpets and opening the tin of magnolia paint.

“Legal matters, such as wills, frame most people’s lives,” James Molloy adds. “But many are baffled by the jargon. AA Legal Services is committed to demystifying the legal jungle, by offering simple, plain English solutions to the needs of modern Britain.”