Saturday, December 05, 2009

The importance of intergenerational wealth transfer

A new generation of professionals, aged between 35 and 45, are relying on inheriting money from their parents to survive. According to a study, by Elizabeth Finn Care, over a half of individuals are banking on inheriting their parents’ estates, however, only a quarter of those parents will be able to leave all their wealth to their children. Don't bother looking for the report on the organisation's web site - it ain't there. Here are couple of factlet from the press release:
  • 51% of those surveyed said they depend on parental support to bail them out of tight financial situations.
  • Half of the older people surveyed said they assume all home care costs will be covered by the government – dream on!
My usual advice, I would take the absolute research results with a pinch of salt, but I am sure the overall picture painted is accurate.

On a not dissimilar subject, this research was covered in the FT. The insurance company (RIAS) has also been researching the financial position of the over-50s. A couple of factlets from this research.
  • It is estimated that the older generation is contributing a cumulative £5 billion each year in childcare costs, but they are also putting money to one side for their grandchildren.
  • Some 25 per cent of grandmas and grandpas put money in a Child Trust Fund or saving account.
The "who pays for what" question in the generations of families is getting more complex. This has an impact on those involved in purchasing decisions, something that should interest marketers. Dick Stroud

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