A new report from the Social Market Foundation (SMF), released on Tuesday, reveals the changing nature of inheritance in the UK and how patterns of financial and non-financial support across generations of families have evolved as we live longer.
The report, Longer Lives, Stronger Families? The changing nature of intergenerational support, finds a majority of people believe that money is better handed down the generations when it is needed, rather than on death. Polling for the report, conducted by Populus, reveals significant support for in-life gifting rather than leaving an inheritance.
- Across the whole population, 6 in 10 agree ‘It is better to give children money when they need it than to save it to leave as an inheritance’. The proportion is higher amongst older people, with 69% of over 65 year olds agreeing with this.
- A number of motivating factors, such as housing costs, appear to have caused this shift. A majority of the public (60%) agree that ‘it is impossible for younger people to get on the housing ladder without support from parents’.
The report also discusses the huge challenges facing the UK that come with changing demographics and people living longer and having fewer children. The report highlights the high proportion of people who expect to have to provide care and support to their older relatives in the future.
- Almost 8 in 10 (77%) people agree that ‘with people living longer it is even more important for families to stay connected across the generations’.
- More than half of those under the age of 55 expect to provide care or support to an older relative in the future. This rises to 6 in 10 of those under the age of 45.
The SMF identify a number of potential social and policy challenges arising from the findings including:
- A shift from end of life inheritances to in-life gifting could lead to increasing pressures on the finances of retires. The ‘freedom and choice’ pensions reforms may leave retirees balancing the twin pressures of younger family members needing support for major life events and living costs versus their own need in retirement (such as social care costs).
- Increases in financial transfers between grandparents and grandchildren could potentially lead to a ‘skipped middle’ generation. This generation has high expectations for receiving an inheritance, with many relying on a lump sum to help them resource their own retirement. However, they may be overlooked by older generations in favour of the young, for whom the need for money appears stronger.
- Longer lives and a greater number of generations in a family could create a group of ‘in betweeners’, aged 60-70, who could face triple pressures of providing care for an elderly parent, providing grandparental and even great-grandparental childcare, whilst also maintaining their place in the labour market.
Nigel Keohane, report author and SMF research director, said:
“We’ve heard a lot in recent decades about family and social breakdown – this report tells a different story: one of families acting together. Our research shows just how important support across the generations is to the modern family, whether that is financial support, living together or providing care to the old and the young.
“It also sends a message to government that we must understand these networks and obligations within the wider family when we decide on policy whether that is care, housing or financial services.
-ENDS-
Notes to editors:
- Copies of the report, Longer Lives, Stronger Families? The changing nature of intergenerational support, are available on request.
- The Social Market Foundation (SMF) is an independent cross-party think-tank. While it accepts support from partners to carry out its work, the SMF retains full editorial independence over its outputs. This report was kindly sponsored by Prudential.
- The analysis presented in this report is based on a nationally representative poll conducted by Populus in November 2014. Sample size: 2,101. Full poll data available on request.
- The report’s author, SMF research director Nigel Keohane, is available for interview.
Media enquiries: Sean O’Brien, sean@smf.co.uk
