New research* from The Openwork Partnership, one of the UK’s largest and longest established financial advice and investment networks, shows more than £293 billion is earmarked for younger generations by generous parents and grandparents.
Its nationwide study shows children and grandchildren can expect an average early inheritance of nearly £9,500 each with 60% of parents and grandparents planning to give gifts for major purchases before they die.
The money is intended for big spending such as paying off student debt or helping with a house deposit and some children and grandchildren can look forward to much bigger gifts with one in nine (11%) of parents and grandparents planning to give more than £25,000 each.
Not all children and grandchildren can bank on an early inheritance with 27% of parents and grandparents – the equivalent of 8.5 million – not planning to give anything.
The financial impact of the Covid-19 pandemic has not damaged early inheritance plans too much with just 6% of parents and grandparents worried they may have to cancel their plans.
In fact, more than one in five (22%) of parents and grandparents say they plan to give more or give the money earlier as a result of the pandemic while 18% say they have cut the amount of the planned pay-out or will delay the gift.
Mike Morrow, Chief Commercial Officer at The Openwork Partnership, said: “The sheer size of the amount that parents and grandparents plan to give as early inheritances shows how important intergenerational wealth transfers are in the economy.
“Average gifts per child or grandchild of nearly £9,500 are significant and £293 billion makes a major contribution to the wealth of younger generations.
“The size of the gifts underlines the need for trusted advice on how best to use the money whether it is to pay for house deposits or pay off debt or to invest for the future. Parents and grandparents as well as children and grandchildren would benefit from an ongoing relationship with a financial adviser.”
The Openwork Partnership has more than 4,200 financial advisers across the UK and operates as a directly authorised, multi-panel distribution network. Its new website includes an interactive map enabling more clients to access support from the network.