Inheritance plans are being torn up as the rising cost of living eats into savings earmarked for loved ones

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  • Most of those who plan to leave a legacy say it will be reduced.
  • One in 10 say rising bills mean they’re not going to transfer anything now
  • The average assessed value of a property has fallen by almost a quarter to £221,000.

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A new study shows the next generation’s financial legacy is shrinking as people struggle to pay rising bills.

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About 60% of adults looking to leave a legacy say the rising cost of living will “certainly” reduce what they can pass on to their loved ones, and 10% say they are now more likely to leave nothing.

According to a survey by Tower Street Finance, the median assessed value of a property has fallen by almost a quarter to £221,000 from £289,000 two years ago.

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Inheritances are declining, with about 17% of people aged 18 to 24 and 15% of people aged 24 to 35 betting on an inheritance to buy a home.

Recent studies have shown that more than half of adults experience anxiety and a quarter depression due to rising bills as worsening economic conditions take a toll on people’s well-being.

Are you having a hard time coping? Find free sources of help here, as well as tips on budgeting, investing, and retirement.

Tower Street Finance reports that despite higher daily food, housing and energy bills, 72% of adults still expect to leave some sort of legacy to friends and family.

But among people expecting an inheritance, 29% say if they receive something within the next 12 months, they will use it to cover living expenses, compared to 7% who said so in the same survey two years ago. .

The testator’s lending specialist also found that 17% rely on an inheritance to pay off debts.

And 17% of those aged 18 to 24 and 15% of those aged 24 to 35 are betting on an inheritance to buy a home.

Interview

Does the rising cost of living mean you will leave less or no legacy?

Does the rising cost of living mean you will leave less or no legacy?

  • Yes 11 votes
  • Not 8 votes
  • Irrelevant 8 votes
  • left no legacy 2 votes

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The Tower also asked people if they could afford to pay for a funeral if needed, based on an average cost of £4,927 in 2021, according to SunLife’s influential annual survey.

About 41% said they would have enough money, while 33% would not be able to cover the costs.

Among those who could not afford it, 35% did not know how they would pay, 15% would borrow from relatives and 14% would take out a loan.

SunLife found that the average cost of a cremation was £3,765 and the average cost of a direct cremation, conducted without service and mourners, but after which the ashes are returned to the family, was £1,647.

Overall, the average cost of wires last year was £4,056.

Tower surveyed about 2,000 British adults, representative of age, gender and location, who either expect to leave or receive an inheritance. At the end of 2020, they asked the same number of people the same questions.

Dicky Davis, founder and director of business development at Tower Street Finance, says the study shows that the value of the property people plan to leave is falling due to the rising cost of living, and so beneficiaries should expect to receive less.

“The current cost-of-living crisis affects not only today, but is likely to have far-reaching consequences in the future,” he says.

“The current cost-of-living crisis not only affects today, but is likely to have far-reaching consequences in the future.”

My 86-year-old grandfather makes large cash gifts – will we have to pay inheritance tax?

This is Money tax expert Heather Rogers explaining inheritance and gift rules here.

Do you have a tax question? Write to [email protected]

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Credit: www.thisismoney.co.uk /

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