One in five Brits have already received inheritance
Researchers discovered millions of young adults, dubbed NINNIs - or ‘Need It Now, Not as Inheritance' - have gone cap in hand to mum and dad for an advance on their legacy. Cash deposits for property, paying off mounting debts and help to get them through difficult periods of unemployment emerged as the most common reasons. Parents have also helped their grown-up children out with cash for University fees, weddings and honeymoons.
The figures were revealed in a research commissioned by Skipton Financial Services, the mutually-owned financial adviser.
16% of under 35s have had close to £50,000, with one in ten having received £100,000 or more. One in 20 parents have already handed over all their liquid assets, leaving only property to pass to their children when they die.
For those who have already given a chunk of their inheritance, it averaged £34,000 and their youngsters received it at the age of 28.
More than half of under 35s want their inheritance before they are 40. 62% of under 35s are expecting an inheritance but only 28% have actually had a conversation with their parents about this.
50% of over 50s expect to have to live off their children's future inheritance to fund their retirement, with 34% admitting that passing down an inheritance will put a strain on their finances.
21% of over 50s do not plan to pass on an inheritance with 31% saying this is because they have already helped out their children financially. 35% will struggle to have enough funds to pass anything on and 12% want their children to stand on their own two feet. 17% said no because their children are poor at managing money.
Main reasons for giving it now are for parents to see them enjoy it now rather than when they're gone (54%), it makes sense to give them money while they can afford it (46%), and they are aware of their kids' financial struggles (35%).
Andrew Barker, managing director of Skipton Financial Services, said: ‘'It is no surprise that with inflation well above expectations, rising taxes, university debt growing by the year and mortgages much more unaffordable than before the credit crunch, young people are more and more desperate for a financial helping hand from their parents. Whereas in the past they would have been happy and grateful to wait for any inheritance that could come their way, a growing number of NINNIs are expecting and relying upon their inheritance earlier and earlier, with more than half wanting their inheritance by the age of 40."
"It is particularly scary that, whilst almost two thirds of youngsters are expecting to receive an inheritance, for the vast majority of these it is purely an assumption as only one in four have has a conversation with their parents about the inheritance. Thankfully for many young adults, the soaring property prices of the last two decades have meant that their parents have enough equity in their estate to duly oblige. However over half admitted that they would have to live off their ‘would be' inheritance to fund their retirement, selflessly putting a strain on their finances to help their children get by.
‘'Many taxes are unavoidable but inheritance tax is a very simple tax and one that can be avoided with proper planning. It seems to me that we have a virtuous circle where kids need the money and parents don't need it so, if this is the case, it is a potentially win-win solution. The only loser is the taxman."