Parents pressed to hand over inheritance before they die
PARENTS are increasingly under pressure to give struggling adult children an advance on their inheritance, writes Consumer Affairs Editor Dana Gloger.
The rising cost of living has left one in five of those aged under 40 asking for part, or all, of their legacy ahead of time, says a study.
The trend has seen beneficiaries nicknamed “Ninnis” – Need It Now Not as Inheritance
Those who received an advance at the age of 28 got on average £34,000.
Nearly a fifth of under 35s have had close to £50,000 from their parents, while 10 per cent received £100,000 or more.
The money was mainly used to pay off debts, for property deposits and to get them through periods of unemployment, but some also used the money for university fees, weddings and honeymoons.
More than half of those aged 35 and under said they wanted to receive their inheritance before they reached 40.
For parents, the main reasons for handing over their assets early was because they wanted to see their children enjoy the money while they were still alive.
The rising cost of living has left one in five of those aged under 40 asking for part or all of their legacy
More than a third said it was because their sons or daughters were struggling financially.
One in 20 parents said they had handed over all of their assets, leaving only their house to pass on to their children when they died, found the research by Skipton Financial Services.
But 35 per cent said that passing down an inheritance early would put a strain on their finances in retirement.
While 79 per cent of parents are planning to pass some money and assets on to their children, a fifth said they would not.
For a third of those, this was because they felt they had already helped out their children financially.
Twelve per cent said they wanted their children to stand on their own two feet, while 17 per cent would not give them money because they felt they were poor at managing their finances.
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 are expecting and relying upon their inheritance earlier and earlier.
He added: “Many taxes are unavoidable but inheritance tax is a very simple tax and one that can be avoided with planning. It seems to me that we have a virtuous circle where kids need the money and parents don’t.
“It is a potentially win-win solution. The only loser is the taxman.”
