HSBC’s Future of Retirement study shows one in five inheritances left by UK retirees is expected to top £250,000.
Almost two thirds (64%) of British retirees expect to leave an inheritance to their children with an average* value of £182,144, according to HSBC’s study, The Future of Retirement Life after work?
HSBC’s research, which surveyed over 16,000 people in 15 countries, found many Britons could inherit even more, with one in five (21%) legacies left to children by UK retirees expected to be over £250,000.
This shows Britons are the third most generous in the world, after Australia and Singapore, with average expected inheritances of £321,743 and £237,799 respectively.
For 12% of women in the UK expecting to leave an inheritance, the amount they end up leaving far exceeds what was their intended legacy when they were working. This compares to just 3% of men.
The findings reveal that many working age Britons rely on inheritance to supplement their retirement. Almost two thirds (64%) said that they expect it will finance their retirement to some extent.
Young Britons in particular may be heading for an insecure future by relying heavily on their inheritance. A fifth (21%) of 25-34 year olds who expect to receive an heritance say it will largely fund their retirement compared to just 9% of 45-54 year olds.
Christine Foyster, Head of Wealth Development, HSBC UK, said: “It’s good to see that even in these tough times, parents plan to leave an inheritance to their children. However, it is vital that people do not rely on these potential windfalls to fund their retirement. Whatever their good intentions, parents may face their own unexpected hurdles and require the money to fund other things such as their own medical and nursing care in later life.”
On a more positive note, HSBC’s research also found that more UK retirees expect to leave an inheritance (69%) than non-retirees expected to receive one (43%).
Christine Foyster continued: “While the figures suggest that some people might be surprised by their parents’ financial generosity, this comes with a warning: you cannot predict what may happen between now and receiving an inheritance. The earlier you start preparing, the more financially secure your own retirement is likely to be.”
The Future of Retirement study also found that many Britons are not waiting until after their death to pass on their wealth to their relatives. 31% of working age people in the UK have already received a significant financial gift or loan from their family with a total average value of £8,189.
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