Baby boomers cut back on spending to leave inheritance

Older people are spending less on themselves in order to leave an inheritance for the younger generation, according to the latest research from Saga Money.

The survey found that 80 per cent of over 50s want to pass money on to their children when they die, with just under half so concerned about leaving a nest egg that they are prepared to forgo treats and luxuries for themselves.

Yet despite the older generation wanting to pass on their wealth, eight in 10 children would prefer their parents to spend their savings on themselves and make the most of their retirement.

Londoners had the strongest urge to leave an inheritance at 63 per cent, while residents of the East Midlands were most likely to need an inheritance. But one in five say that their future finances are dependent upon them receiving an inheritance, compared to a national average of one in seven.

Only a quarter of retirees nationally said they would spend all their money to maximise their lifestyle in retirement and only a third did not think they would have enough money to leave an inheritance.

In addition to leaving money to family when they die, Saga Money, found that 40 per cent of over 50s want to leave financial gifts to loved ones while they are still alive by helping out with house deposits or weddings costs.

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Alex Edmans, head of the Saga Equity Release Advice Service, says the results highlight how important it is for families to talk about money: ‘Inheritance can be an emotive issue therefore it is important for parents to discuss inheritance with their children, but they should not feel obliged to leave an inheritance. 

‘For those who would like to leave something behind they should realistically consider how best to use the money they have to make sure they have enough to fulfil their retirement goals and have something left for later life care, as well as what to leave for their children.’

This is article was originally written by our sister publication Moneywise.

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