Issues relating to intergenerational wealth and the growing need to provide financial assistance to the younger generation have become a recurring theme in today’s society and, with so many people now benefiting from inheritance pay-outs, this has inevitably led to more and more family conversations about ‘pre-inheritance’.

The scale of inheritance

According to a recent study conducted by Key, 11.6 million people in the UK received an inheritance at some point during the past ten years. More than half of these were left money by their parents, with grandparents the next most likely source followed by uncles or aunts, family friends, cousins and siblings. Interestingly, the average age for someone to receive an inheritance was 47.

Right time of life?

For many people, inheritance can involve substantial, potentially life-changing sums of money, especially when property is involved. However, the idea of inheritance arguably works best when a beneficiary receives support when their financial need is greatest. By the time most people receive an inheritance though, they have typically already built up a sizeable stock of assets themselves.

Providing a helping hand

As a result, the idea of ‘pre-inheritance’ is gaining traction. Early inheritance gifts enable people to provide a cash injection at a time when their support is most needed. In addition, ‘pre-inheritance’ provides the person making the gift with an opportunity to witness the impact their generosity has on a loved one’s life.

Sound advice is key

Before making an early inheritance gift though, it is vital to fully consider all of the consequences, particularly in relation to your own financial situation. Understanding any potential tax implications, especially relating to Inheritance Tax, is also clearly paramount. Given the complexities involved, it is therefore essential to seek professional financial advice prior to taking any actions.

It is important to take professional advice before making any decision relating to your personal finances. Information within this page is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.

Equity release will reduce the value of your estate and can affect your eligibility for means tested benefits.

Tax, Estate and Inheritance Tax planning are not regulated by the Financial Conduct Authority

The value of pensions and investments can fall as well as rise. You may get back less than you invested.

CA Financial Services Ltd are an Independent Financial Adviser based in Sevenoaks, Kent. From our Sevenoaks offices, we offer IFA services throughout Tonbridge, Tunbridge Wells, Dartford, Orpington and across into Sussex and Surrey. Please call us on 01732 617 950 to book a free initial appointment.

CA Financial Services offer financial advice, pensions, investments, ISAs, Equity Release and Inheritance Tax Planning for the whole family. We have 14 years’ experience as Financial Advisers based from Sevenoaks and are truly independent, allowing us to give our customers the best financial advice possible.

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