Over-optimistic UK adults overestimating their inheritance

If you’re expecting an inheritance from your parents, are you overestimating the amount of money you’ll receive? Our new research and the latest Office for National Statistics (ONS) figures suggest you most likely are.

New research from Just has found that, on average, UK adults expect to receive an inheritance of £132,000. However, ONS figures suggest that most people will receive much less.

The average UK inheritance

ONS research has found that the average inheritance passed down by parents in the last two years was £30,000. This is £102,000 less than the average amount expected by UK adults, and a whopping £130,000 less than those aged 18 to 34 hope to receive.

Age affects expectation

The youngest generation has the greatest expectations of inheritance with 18 to 34 year olds saying they expect to receive or have received £151,000. It wasn’t much different for the next age bracket, with those aged 35 to 54 anticipating a similar amount (around £148,000).

Over 55s, who are more likely to have already received their inheritance from their parents, said they expected or had received £98,000. While this is less than the younger cohorts, it’s still a long way over the ONS figures.

Although for some, their expectations of receiving an inheritance are much lower – with more than half (57%) of all UK adults not expecting to receive an inheritance at all.

A helping hand on the property ladder

The research also revealed what many people plan to do with their inheritance. Property played a major role, with 98% of people under 40 who expect an inheritance saying it will help them buy their first home.

Given the apparent disparity between expected inheritances and what has been the reality to date, over-estimating the value of an inheritance could have a major impact on people’s chances of achieving those property aspirations.

Important conversations

Stephen Lowe, group communications director at Just Group, believes the significant gap between expectation and reality highlights the importance for families to discuss their financial situation.

“The rise in house prices over the last few decades seems to have left younger people pinning their hopes on receiving an inheritance windfall to help them join the property market, but the mismatch in expectation versus past reality may leave many people disappointed.

“As people live longer, they will need to fund more years of retirement – which may include paying for social care. So, it’s surprising that people are quite so confident in the size of inheritances they expect to receive.

“Families tend not to talk about money and death. But if we don’t talk about these themes it becomes very hard to make practical plans – be that getting onto the property ladder or preparing for care in later life. It might not feel comfortable to broach these subjects but it’s better than misunderstandings and disappointments later. It really is good to talk.”

 

My Home My Future is our campaign on how the UK thinks and feels about property. Learn more and discover real stories from real people today.