28 September 2020
Almost half of all Baby Boomers say they have enough personal wealth that they can afford to gift some of it away during their lifetime, new research shows.
The figures, collected by YouGov for Quilter, show that 48% of Baby Boomers say they could afford to give money to family members before they die. Less than a third (29%) ruled it out, and 26% say they are unsure.
Of those that believe they can afford to make lifetime gifts, 40% say they would favour multiple small gifts and a third (33%) would prefer larger one-off wealth transfers. A further 30% are unsure which would better suit their needs.
Despite the large number of people that estimate they can afford to pass some of their savings and assets to family members, government statistics suggest only between 31-39% of people age 50-69 have ever given a financial gift. And just a small minority appear to have a plan for regular annual gifting, with just 15% of 50-59 year olds having gifted in the last two years:
The statistics reveal the vast scale of the market for wealth transfer planning and lifetime gifting and form part of Quilter’s campaign to raise awareness around the importance of intergenerational planning opportunities. It is estimated that around £5.5trn of intergenerational wealth transfers will occur over the next 30 years*, presenting both an opportunity for intergenerational financial planning, but also a potential risk to firms as their client bank ages.
Throughout the autumn Quilter will offer a series of virtual events, analysis and support available to advisers and clients to promote intergenerational financial planning conversations.
Quilter retirement planning expert, Ian Browne, says:
“The scale of intergenerational wealth planning set to take place over the coming decades is vast. Many of the Baby Boomer generation has accrued significant personal wealth having benefitted from rising house prices, stock market growth and the higher prevalence of generous pension schemes.
“In contrast, younger generations often find themselves facing high house prices and the need to make significant personal contributions to their DC pensions in order to secure a decent retirement fund.
“This data shows that in the Baby Boomer generation there are a huge number of affluent families that are interested in lifetime gifting in order to give younger generations a financial boost.
“Despite this, there is still a clear ‘gifting gap’ between the number of people that can afford to gift, and those that actually have a lifetime gifting plan in place. This is a clear opportunity for advisers to help, in addition to supporting those people that are still unsure if gifting is a viable option for them.
“Gifting is a great way to help families make the most of their financial assets, and for clients to enjoy seeing their life savings helping younger generations to prosper.
“For financial planners, it is critical to speak to existing and prospective clients about the options for lifetime gifting. Not only is it an important part of the tax planning toolkit, but it is also a valuable route to engaging a generation of future clients.
“Encouraging intergenerational planning conversations with multiple members of the same family can help to embed long-term value in a financial planning business, ensuring their relationship with a client doesn’t end when their estate passes to their family.”
Research commissioned by Quilter and undertaken by YouGov Plc, an independent research agency. All figures, unless otherwise stated, are from YouGov Plc. The total sample size is 1,544 UK adults, comprised of 529 Baby Boomers, 501 Generation Xers and 514 Millennials. Fieldwork was undertaken between 07/07/2020 - 08/07/2020. The survey was carried out online.
*Passing on the pounds – The rise of the UK’s inheritance economy. Published May 2019. Author: Kings Court Trust