Third of 'Boomers' fear how young will spend inheritance

• A third (32%) of baby boomers (aged 55-73) are reluctant to pass their wealth to someone with a different attitude to money than them
• Members of ‘Gen Z’ (16-23) are significantly more likely to take a short-term approach to money than generations before them
• Generational differences in attitudes exist, highlighting issues for inheritance planning

A third (32%) of baby boomers (aged 55-73) are less likely to pass their wealth to someone with a different attitude to money than them, according to new research from abrdn.

This could pose challenges for estate planning as abrdn’s research also revealed significant differences in financial attitudes between generations.

Across the entire population, more people prioritise making financial sacrifices for their future wellbeing than those that prefer to spend in the ‘here and now’ to live life to the fullest (58% vs. 31%).

However, at a generational level, the proportion of people who prioritise a short-term financial outlook is significantly higher amongst ‘Gen Z’ (16-23, 39%) than baby boomers (22%) – a mismatch that could colour older generations’ wealth transfer decisions.

Overall, 90% of people plan to pass money on to family or friends in their lifetime or on death – with more people planning to do so during their lifetime (51%), than those that plan to do so after death (39%).

The single most common way people plan to pass most or all of their money on is by lifetime gifting to the generation below them (e.g. children, nieces or nephews) (28%), followed by passing wealth to someone in their own generation (e.g. a spouse or partner) after they die (23%).

Jonny Black, strategic director, abrdn, Adviser, said: “Advisers have a critical role to play in helping clients transfer wealth in ways that accommodate their concerns.

“For example, trusts could be the perfect option for allowing clients to gift to the next generation, while still retaining a degree of control. Clients will value advisers’ support in understanding the full range of available options, and in navigating the complexities of setting them up.”

abrdn’s research also explored the extent to which advisers had relationships with other people in clients’ families.  

Nearly nine in ten (87%) advisers have a relationship with clients’ children, grandchildren, or both. Meanwhile, just over a quarter of advisers (29%) report that they have relationships with more than one family member for more than half of their client base.

Jonny Black added: “This is the era of the ‘great wealth transfer’ – trillions are set to be passed into new estates in the decades ahead. While younger generations’ attitudes to money may be different to those older than them, they’ll still need support in managing any inheritance they receive in line with their financial priorities, whatever they may be.

“Advisers will be invaluable here. It’s encouraging to see that so many have already invested in building relationships with clients’ family members – including the younger generations. Firms should be continuing to review opportunities to start or develop these cross-generational connections. Done well, it will pay dividends for all involved.”

ENDS

 

Media enquiries

For further information, contact:

Calum Anderson
E: Calum.Anderson@citypress.co.uk
T: 0131 460 7922

Rachel Cashmore
E: Rachel.Cashmore@abrdn.com
T: 0734 170 3358

Methodology

Data generated from a survey of 1,000 members of the UK population aged 16+, and a survey of 302 UK financial advisers regulated to give financial planning advice on long-term savings like pensions and ISAs.

Both were conducted by Censuswide on behalf of abrdn in November 2022.

Notes to Editors

abrdn is a global investment company that helps clients and customers plan, save and invest for their future.

abrdn manages and administers £508 billion of assets for clients, and has over 1 million shareholders. (Figures as at 30 June 2022).

Enabling our clients to be better investors drives everything we do. Our business is structured around three vectors – Investments, Adviser and Personal – focused on their changing needs.

For UK wealth managers and financial advisers, we provide platform technology, expertise and support to make it easy for them to run their businesses – and to deliver the outcomes their clients want.

We offer content and experiences that can be personalised to suit every type of business and client, giving advisers powerful data and insight to make better decisions.

We’re the number one adviser platform business in the UK for assets under administration (Fundscape Q1 2022). We’re also the first UK adviser platform provider to receive and retain an ‘A’ rating from AKG for the financial strength of our platforms (AKG financial strength reports 2021).

As at 30 June 2022, our Adviser vector administers £68 billion of assets.

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