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Catch up with the latest press releases from LV=

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Millions of Brits relying on inheritance windfalls

Press release: 05/08/2015

  1. One in three (35%) working Brits say they are reliant on inheritance for future financial stability
  2. One in five (20%) say they won’t be able to comfortably retire without such help
  3. But one in four (24%) retirees plan to leave nothing to heirs or give their cash to charity

One in three working Brits (35%) are relying on inheritance in order to achieve a stable financial future, but they could be in for a shock, according to a study released today1.

The research, by retirement specialist LV=, shows millions of Brits are banking on an inheritance to provide them with financial assistance, with this cash windfall often key to their retirement plans2.

The most common thing that Brits say that they would do with an inheritance is to pay off their mortgage and clear other outstanding debts3. One in six people (16%) would use inherited funds to bolster their retirement savings.

Unfortunately, for those individuals that are hoping to be left an inheritance, the number of people leaving significant amounts to the younger generation is falling, with most people are leaving less or nothing at all4.

According to LV=’s research, a quarter of retirees (28%) say they don’t expect to leave much to their children. A fifth (20%) say they intend to spend their money enjoying their retirement rather than leave it behind and 4% say they will follow Bill Gates and Warren Buffett’s lead and leave their cash to charity.

Without such help many working people admit that they would be unprepared for their later years. One in five (20%) say they will struggle to retire comfortably without inheriting and a quarter (25%) will have to work longer than planned should they not receive such a windfall.

John Perks, Managing Director of LV= Retirement Solutions, said: “People now spend almost as long in retirement as they do in the workplace, so it’s worrying to see that many people say they are reliant on something essentially out of their control to provide them with a comfortable retirement. With all the everyday demands on our time, retirement planning is often at the bottom of the to-do list, but it is important that people take steps to secure themselves the lifestyle they hope for in retirement. We would encourage people approaching retirement to seek advice to get the most out of their pension savings.”


Notes

UK nationally representative research carried out by Opinium between 24th-27th March 2015, questioning 2,004 UK adults online, of which 516 were retired.

  1. Of those questioned who were not yet retired (1488 adults), 35% said they relying on some sort of inheritance to help financially now or in the future.
  2. 20% of non-retired respondents said that without some form of inheritance they will struggle to have a comfortable retirement.
  3. Respondents said that if they were to receive an inheritance 60% would make other provisions (apart from putting towards pension) to ready themselves for later years such as paying off debts (31%) or pay off the mortgage (29%).
  4. Sourced from HMRC statistics. Latest figures on number of IHT tax paying individuals (not including estimated figures) shows the number of individuals falling from 35,000 in 2005-6 to 16,000 in 2011-12.

About LV=

LV= employs 6,000 people and serves over 5.7 million customers with a range of financial products. We are the UK’s largest friendly society and a leading financial mutual.

When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.

We offer our services direct to consumers, as well as through IFAs and brokers, and through strategic partnerships with organisations such as ASDA, Nationwide Building Society and a range of trade unions.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.