Millennials willing to forgo inheritance to ensure parents can comfortably retire amidst rising costs

• 32 per cent of millennials would rather their parents focused on using their cash to fund a comfortable retirement, rather than pass any down to them in their lifetimes
• Barclays Wealth research reveals financial planning concerns of 40 year old millennials and their parents

New research from Barclays Wealth has shown that the oldest of the millennial generation would prefer their parents to use their cash to fund their own, comfortable retirement, rather than receive it as an inheritance¹.

The UK-wide research of 4,000 40-year-old millennials and their parents reveals disparities when it comes to financially planning. Nearly all parents surveyed (99 per cent) intend on passing an inheritance onto their children or grandchildren, with almost two in five (37 per cent) anticipating gifting more money this year to help their children with the rising cost of living.

However, a third (32 per cent) of adult children would rather their parents kept it all to themselves, to support a comfortable retirement.

The desire from each generation to financially support the other comes against the backdrop of financial challenges on two fronts: continued market volatility impacting pension pots and property prices on the one hand; and rising living costs on the other. This makes it harder to support bigger financial commitments – of those older generation parents that are worried about funding their whole retirement, over a third (36 per cent) are specifically concerned about funding the cost of care².

Juggling financial priorities makes communication and forward planning even more vital, but this does not always happen. Two in five (38 per cent) of parents admit to not speaking to their children about their inheritance plans, and one in four have not developed a plan to protect their child’s inheritance should their child go through a difficult divorce.

With cash required to go further than ever before, almost a third (31 per cent) of the parents of millennials are worried about supporting their own immediate living costs, and one in five (19 per cent) are considering downsizing.

Clare Francis, Director of Savings and Investments at Barclays Wealth, said: “Many people want to do what they can to ensure they maximise the amount they leave to their family and minimise inheritance tax, but working out how much you can afford to give away during your lifetime isn’t easy. With finances being stretched in all directions, it can be incredibly stressful if you want to support your children in the short-term, while making sure you don’t find yourself struggling further down the line.

“Even though most children would be very grateful if their parents are able to pass on some inheritance while they’re still alive, they wouldn’t want them to have money worries in the future as a result. This is why it’s not only important to plan, but also to include your family in any conversations – it can make such a difference and help remove some of the pressure many parents feel when thinking about how and when they’ll pass on their wealth.”

To find out more about Barclays Wealth Management and Investments visit: https://www.barclays.co.uk/wealth-management/

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Notes 

1 All data, unless otherwise specified, is taken from 2,000 consumers who turned 40 in 2021, who will turn 40 this year or who will turn 41 this year; and 2,000 parents of consumers who turned 40 in 2021, will turn 40 this year or will turn 41 this year. The 2,000 parents of consumers all had assets of at least £1m, including property. The 2,000 40-year-old Millennials are already investors, or have considered investing their money. Data gathered July 2022. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.

2 31 per cent of parents surveyed are worried about funding their whole retirement. Of this 31 per cent, 36 per cent worry specifically about funding the cost of care.