, 14:37, Thursday 16 June 2011
Are you in line for a fat inheritance one day? If so, lucky you. Who wouldn't want a cascade of wealth into their bank account? The drawback is that it generally means the death of your parents, which is nothing to look forward to.
There is another reason why you shouldn't get too excited about the prospect of an inheritance - your chances of getting one are growing slimmer by the day.
In fact, many of us can wave goodbye to our inheritance altogether.
Inherit the wind
People get worked up about inheritances. Remember when shadow Chancellor George Osborne promised to scrap inheritance tax for all estates under £1 million, back in 2007? The country briefly went wild for all things Tory, forcing Prime Minister Gordon Brown to postpone his plans for an early election.
That's how strongly people feel, and understandably so. The meek may inherit the earth, but everybody else seems quite keen to inherit their parents' property, and the remains of their bank account.
But increasingly, like the meek, we are doomed to be disappointed.
Be glad you're not Welsh
Only 52% of those planning to retire this year are confident of passing on an inheritance, according to new research from Prudential. One in four have already ruled out leaving a financial legacy, because they desperately need the money themselves.
As people worry about funding their final years, leaving an inheritance has slipped from being a "need to do" to a "nice to do", which isn't so nice for needy children.
As is often the case, the Scots buck the national trend. An impressive 67% still plan to leave an inheritance. In Wales, the figure is just 43%.
Baby boomers ate my inheritance
You can blame the baby boomers, if you like. In the old days, it used to be idle youths who squandered the family inheritance, on girls, gambling and gin. Fat chance now. The parents got there first.
Many pensioners have run up mighty debts, according to Key Retirement Solutions. One in three equity release customers now use the payout to clear their debts. Some owe as much as £90,000 on credit cards. Others have £250,000 unsecured loans, or £340,000 mortgages. They won't be leaving much for the kids.
You can also blame doctors and scientists. As we live longer, we spend more. You can't live past 90 and expect to leave a pile of money when you're gone. You're going to need every penny you've got.
Especially if you spend your final days in a care or nursing home.
Good Byee! Don't cryee!
Nursing home fees will be the ruin of many an inheritance. One year in a care home will now set you back £26,208, according to elderly advice specialists FirstStop. Yet the average pension is just £11,596 a year.
If you have more than £23,000 in capital, including your property, you will have to meet the full cost of your care. The state will only offer maximum support once your capital falls below £14,250. There is more detailed information here.
Every year, a startling 70,000 people sell their homes to pay for care fees.
Say your parents' property is worth £163,083, the current national average. After five years in a care home, your inheritance will have shrunk to just £76,215. If both your parents end up in care, you will get even less.
And it could be worse. Some nursing homes cost £700 a week. That's £36,400 a year. FirstStop warns that selling the parental home may not be enough to fund care.
Still, at least you won't need to worry about inheritance tax.
You may get more state support for care costs if you live in Scotland. Perhaps that explains why the Scots are better at passing on their inheritances.
Easy come, easy go
We shouldn't grumble. For most people, the six-figure inheritance is a relatively recent phenomenon, driven by soaring house prices. Rising life expectancy and the shrinking state now threatens to strangle it at birth.
The property market giveth, and the nursing home taketh away.
There has been a shift in attitudes towards the inheritance among younger generations. It is now common for children to say: "It's your money, pops, you've earned it, enjoy it."
That's big-hearted, and you have to applaud it. Just make sure you also earn your own money, otherwise you will have very little to enjoy, once you hit retirement.
One in 10 of us are still banking on an inheritance to pay our pension, according to Prudential. Others are banking on it to buy their first home, or clear their debts.
Your parents' property is already their pension, their debt relief fund, and their long-term care fees plan. You want it to be your property, pension and get-out-of-debt-card too? You can wave goodbye to that notion as well.
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