New retirees can't afford to leave inheritances
Under a third of new retirees say they will be able to leave their loved ones an inheritance when they die.
Just 28% of people retiring this year believe they will have the money to spare, according to new research from Prudential.
This is the lowest level in six years the insurance company says, and compares to a high of 52% in 2011.
Prudential blames the change on increasing pressures on retirees to provide financial support to their families.
Its research found that 35% of retirees give family members regular handouts, averaging at £250 a month, or £3,000 a year. Nearly one in seven is paying more than £500 a month.
Stan Russell, a retirement income expert at Prudential, says: “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.”
The research also reveals that new retirees are helping out an average of four family members. Unsurprisingly, children and their partners were the most likely recipients of the cash in around 80% of cases, however 15% were helping out their own parents and staggeringly 5% were offering financial support to their grandparents.
A May 2016 report from Legal & General revealed that the Bank of Mum and Dad is a £5bn mortgage lender.
Mr Russell adds: “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. In fact, these research results show that the concept of the ‘bank of mum and dad’ is already out of date – many of this year’s retirees must feel like the bank of son, daughter, grandson, granddaughter, partner, granny and grandad, all rolled into one.”