UK adults have big plans for their inheritance

If you’re expecting an inheritance from your parents, do you know what you’ll spend it on?

Our research has revealed how many UK adults plan to use their inheritance, and how their priorities change with age.

Spending your inheritance

Roughly 43% of UK adults expect to receive an inheritance, but what’re their plans for spending it?

Our research revealed that different age groups have different plans. However, property was a top-three priority for all age groups, demonstrating how important homeownership is to people of all ages.

Nearly a third (30%) of those aged between 18 and 34 said they would use the money to take their first step on the property ladder. This could reflect the challenge younger generations face in buying their first home.

Adults aged 35-54 were more concerned about securing their financial future. A third (32%) plan to use the money to pay off their mortgage, which was the most common response from this age group.

Home renovations were more important for over-55s than any other age group, with more than one-in-five (22%) planning to use inheritance money to improve their homes. One in seven (15%) also said they also plan to pay off their mortgage.

Inheritance and your home

Stephen Lowe, group communications director at Just Group, said the research reveals that receiving an inheritance is crucial to the property dreams of many UK adults. He commented: “Inheritance can provide a significant cash windfall and it is evident that many people are planning to use these funds to buy or improve their property in some way.

“The contrasting priorities of the different generations clearly reflect the property journey that many in the UK will follow over the course of their lives. The youngest focus on getting on the property ladder, before attention turns to paying off the mortgage and, finally, we see over 55s starting to consider home improvements as they move into retirement.”

Preparing for the future

Alongside property plans, our research revealed that saving and investing are also popular ways to use inheritance.

For people over the age of 35, starting to make preparations for retirement – such as saving for later life care or boosting their pension pot - becomes a bigger focus. 23% percent of 35 to 54-year-olds said they would use some money to prepare for retirement, as did 22% of over 55s. Although it still wasn’t as high a priority as paying off their mortgage.

Putting the money to good use

Stephen Lowe observed that while every individual’s situation is different, it’s important for everyone who receives an inheritance to think carefully about how they spend it. By taking into account your short- and long-term needs, you can ensure you put the money to good use.

He commented: “This research gives an indication of how important receiving an inheritance is for many in the UK – young and old. That lump sum will allow them to make significant life decisions and help them accelerate achieving some of their financial plans that may have taken years to achieve otherwise.

“We would encourage all adults who receive a sizeable inheritance to explore receiving regulated financial advice from a professional adviser. A qualified adviser will help people to consider what they most want to achieve in their lives and then help them to build a financial plan to meet these goals.”

 

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.