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THE INVESTOR
|
23
INTERGENERATIONAL
WEALTH
T
here is no hiding
the fact that in
comparison with
millennials, the
over-55s are a
fortunate group
financially. Private and final salary
pensions along with property account
for 75% of the £11 trillion of wealth held
in the UK and more than half of that sum
is held by the baby boomer generation
1
.
According to the Joseph Rowntree
Foundation, young adults and people
in work in the UK are now more likely
than pensioners to be in poverty.This
follows a huge increase of insecure
employment and lack of affordable
housing; by contrast, pensioners have
benefited from governments’ targeted
policies and now have the lowest
poverty rate of any age group
2
.
Most over-55s will feel that they
worked hard for their wealth and
may dispose of it as they choose.Yet
a cross-generational survey by
consultancy BritainThinks
3
shows that
most people believe that the higher
age bracket became successful by
accident rather than design.
The boom in house prices is, of
course, one of the biggest single factors
of the over-55s’ prosperity, with
many perfectly ordinary houses in
certain regions now worth in excess
of £500,000.As a result, one study
estimates that £2.8 trillion of wealth
held by the over-55s will be transferred
over the next three decades
4
.
So is it time to get busy gifting?
Many parents are, indeed, dipping into
their pockets. Recent Legal & General
calculations estimated the ‘Bank of
Mum and Dad’ will lend £6.5 billion
to help family members get on the
property ladder in 2017, making it
effectively the tenth-largest UK
mortgage lender
5
.
Other parents are, understandably,
more hesitant. Just over a third of
JACK