It’s nice to think that you’ll be able to leave an inheritance, but it seems to be something that increasingly few of us will be able to do.
According to research by Prudential, only 28% of those retiring this year think they’ll be able to afford to leave an inheritance – the lowest level for six years.
This is despite recent changes to rules around inheritance tax and passing on pension pots.
Those who feel they will be able to leave an inheritance expect to leave £191,000 on average.
But all of this doesn’t necessarily mean that families are missing out.
Nearly one in seven (13%) are paying more than £500 a month to support various family members.
On average, those retiring in 2016 are providing financial support to four family members and are most likely to support their children and/or children’s partners (81%).
Prudential’s study shows that 15% are providing financial support to their parents and, amazingly, 5% are paying money to support their grandparents.
The research reveals that 8% give money to cover everyday expenses such as food or travel. A further 8% make one-off contributions to the cost of luxury purchases like cars, holidays or TVs.
Stan Russell, a retirement income expert at Prudential, said: “With the average retirement now lasting nearly 20 years, people retiring in 2016 who provide support to their families could hand over an average of £60,000 during their retirement.
“With this in mind it is perhaps unsurprising that the numbers of people expecting to leave an inheritance is on the decline.
“This kind of financial support will make a significant dent in all but the largest of retirement pots, but it can be overlooked by many when planning for life after work.”
He said a consultation with professional financial advisor can help people plan their retirement finances.
“The pressure on retirees to provide this financial support continues to rise in line with the growth in the cost of housing, education, childcare and support for older people,” added Mr Russell.
“In fact, these research results show that the concept of the ‘bank of mum and dad’ is already out of date – many of this year’s retirees must feel like the bank of son, daughter, grandson, granddaughter, partner, granny and granddad, all rolled into one.”