Survey highlights millennials ‘unrealistic expectations’ of inheritance

A recent survey by wealth manager Charles Stanley suggests that some millennials have unrealistic expectations of inheritance and how it may provide their way to buy a first home.

The survey suggested that young people expected to receive nearly £130,000 in inheritance when in reality the median average amount handed down was only £11,000; their timing was off as well because one in seven young adults said that they expect to inherit money before they are 35, when in reality the typical inheritance age is between 55 and 64.

In terms of helping them on to the housing ladder, this finding is crucial; advisers say that relying on an inheritance to provide a deposit for a first home was often misguided, even if older family members intended to pass on money when they died and even when that money arrived, ONS data showed that inheritance was much less lucrative than many asked in the survey expected.

‘ONS data showed that inheritance was much less lucrative than many asked in the survey expected’

In announcing its findings, John Porteous, from Charles Stanley said: ‘People are living longer than ever, so relying on an inheritance to get on the housing ladder is a risky strategy as you may get less, and much later than planned.

‘In reality, most people save and invest to get on the housing ladder. Starting early and planning ahead is essential to achieving the deposit you need.’

22% of millennials said that they expected to receive inheritance to use as a deposit, although official statistics suggest only 7% actually did so; on average the expectation of when that inheritance would be received was at aged 50, yet figures from the Office for National Statistics (ONS) show that the average age is actually 55.

Industry commentators have long argued that the UK public is ‘largely ignoring’ financial planning for death.

Dan Garrett, founder of will writing service Farewill, told the BBC that 30m people in the UK had not written a will, seemingly because it has been considered a lower priority; he also called on the government to clarify its plans for probate fees.

The government is planning to substantially increase the cost to bereaved families of settling the estates of deceased relatives and with the escalating cost of later life care eating into many estates, this is just another financial goal that will be more easily achieved with a well structured, long-term investment strategy.