Over half of UK adults don't have a will
Unbiased.co.uk, the professional advice website, has announced the launch of its annual ‘Write a Will Week', beginning on Monday, 22 October, in partnership with Octopus Investments ("Octopus").
Unbiased.co.uk's research reveals there are now over 28 million adults (58%) without a will, leaving no guarantee that their assets will be passed on as they wish while also running the risk of paying more inheritance tax than necessary by not tax planning.
Regional Variations
The South East tops the list as the most prepared region, yet only half of those surveyed (49%) have a will in place.
Despite this lack of planning, 74% of UK adults said they would like to pass on money (with an average value of £45,000) to their loved ones when they pass away, while 56% of people said that they wish to leave assets like jewellery and paintings to loved ones. The survey revealed that 65% plan to leave property worth an average of £199,000.
The research showed that children and grandchildren continue to be the main beneficiaries of wills, with 36% of UK adults wanting to leave enough money to fund some aspect of their child or grandchild's future. With tuition fees rising, 13% said they would like to fund their child or grandchild through university, and 22% would like to boost their child or grandchild's savings. Charities and pets also stand to benefit with 8% of UK adults wishing to donate a significant amount to charity and 7% of people wanting to leave enough money for their pets to live comfortably after they have gone. Yet without a will in place all these beneficiaries stand to receive nothing.
Where there's a will there's a way
Procrastination remains the number one reason for not writing a will. Nearly a third of those without a will (30%) stated that they plan to make one when they ‘get older', while 11% said it never occurred to them and 21% felt that they didn't have anything of value to leave behind. Interestingly, 11% believe their estate will go to the right people automatically, yet dying without a will means their assets will be divided according to the rules of intestacy, which could leave stepchildren or unmarried partners in particular in a vulnerable position.
Although the average cost of getting a solicitor to write a will can be as low as £120 for singles and £200 for couples, 14% of UK adults said that they have not written a will yet because they are worried about the costs involved. Almost 7% said they wanted to enjoy spending their savings while they are alive instead of saving them to pass on to future generations, while 8% of over 55s claimed they were superstitious and writing a will is tempting fate.
Impact of inheritance tax
If an estate exceeds the threshold for inheritance tax - currently £325,000 or £650,000 for married couples - individuals should consider including some tax planning in their will. Yet worryingly, 42% claim that they haven't thought about the impact inheritance tax may have on their estate and 11% didn't know that it could affect their estate.
Of the 39% of people who have considered inheritance tax planning, 20% have gifted assets to friends and family during their lifetime and 15% have placed their assets under trust to minimise the impact of inheritance tax.
Karen Barrett, Chief Executive of unbiased.co.uk, said: "This is our fourth annual ‘Write a Will Week' and the topic continues to be as important as it was four years ago. Too many people are simply unaware of the control that having a will gives you and its importance in ensuring your loved ones receive what you intended them to.
"We are delighted to have Octopus on board this year to help us try and raise people's awareness about the importance of writing a will and planning for your inheritance. People should be thinking early on about how best to protect their belongings and assets to ensure they go to those they intended them for when they pass away.
"People spend their lives providing for their loved ones, yet lack of action in planning their affairs for after they have gone could lead to a hefty inheritance tax bill, not to mention additional stress for the family and potential delay in distributing assets.
"The easiest way to ensure your estate goes to the people you want to when you die is to consult a solicitor or financial adviser, who can help you interpret the current inheritance rules and apply them to your situation. You can carry out a free and independent search at unbiased.co.uk to find a local financial adviser and solicitor."
Guy Myles, co founder and managing director at Octopus, added: "Write a Will Week is an important campaign and one that Octopus supports wholeheartedly. We believe that people should do whatever they can to ensure that their loved ones can live comfortably. This is why we have a range of tax efficient products, which allow people to reduce their inheritance tax liabilities while still having control of and access to their money.
"We see writing a will and inheritance tax planning as going hand in hand. Every year more people are finding that their personal estate is valued in excess of the current inheritance tax nil rate band of £325,000. When an individual dies, anything valued over and above this amount could be taxed at a rate of 40%, which would take a large chunk out of the money intended to go to family and loved ones.
"Sometimes all people need is a little encouragement. So, as part of Write A Will Week, Octopus will be working with solicitors and financial advisers, hosting regional events for people interested in finding out more about the benefits of making a will. For further information, please visit the Octopus website octopusinvestments.com/."