FT Adviser (17/06/2019) – More than 5m savers aged 55 and under are playing ‘inheritance roulette’ and have changed their financial plans as a result of what they expect to inherit, new research has found.
Canada Life, which polled 1,000 UK adults aged between 16 and 75 who own a property and have a pension, found that many individuals were saving less, while others were delaying house moves as they banked on a legacy windfall.
The largest proportion of changes by under 55s were made to their saving plans, with half of people either saving less (25 per cent) or saving more (25 per cent) as a result of their inheritance expectations.
According to Neil Jones, wealth management and tax specialist at Canada Life, it’s a risky strategy to bank on an inheritance that may not materialise, and an even riskier strategy to change plans based on expectations of inheritance.
Alan Chan, director and chartered financial planner at IFS Wealth and Pensions, has experienced this behaviour from some of his younger clients.
He said: “They bank on an inheritance windfall and do little by way of planning or saving themselves.
“We try to encourage them to forget about the potential inheritance because it’s impossible to know when they’ll receive it, if any, and it might be much less than they think as the parents might need it in their old age with care being expensive, and so on.”
Full article link: https://www.ftadviser.com/pensions/2019/06/17/millions-of-savers-play-inheritance-roulette/
