A recent report by a leading public policy think tank, has identified some significant challenges due to an increasingly ageing population.
These challenges, which include funding the cost of elderly care, are likely to reduce the assets of the older generation. In response, six in ten people now believe that it’s better to hand money down the generations during their lifetime than it is to leave money in a Will. Interestingly, these ‘lifetime’ gifts are being made to grandchildren rather than children, in many cases to help them on the property ladder.
Creating what has been dubbed the “skipped” generation, many people are now likely to lose out financially due to reduced inheritance prospects as a result of lifetime gifts to the younger generation.
What’s more, in making these gifts, and reducing the assets available to fund future care needs, 55% of under 55s are now worried about having to provide future care and support to the elder generation.
Commenting on these findings, Nigel Keohane, author of the report, said: “We found the ‘skipped middle’, in their middle years, have a high expectation of an inheritance. One in five expect this. But they might not get one. Our polling shows that 44% of over-65s are worried about the cost of their care in later life. An even larger number, three quarters, of over 55s worried about the cost of social care and that they won’t be able to leave an inheritance.”
Mr Keohane added:
“Our research shows just how important support across the generations is to the modern family, whether that is financial support, living together or providing care to the old and the young.”
It is, of course, perfectly understandable that different generations of a family will want to provide financial support where possible. However, it is vital to be aware of the consequences of any significant lifetime gifts, and how these are likely to be viewed by a Local Authority if the person making the gift develops care needs and comes to require financial support.
At Linder Myers, we are experts in this area and can provide you with advice tailored to your circumstances to ensure that you understand the effects of any lifetime gifts. We are also pleased to offer a fixed fee service to those who are worried about the future cost of care.
Please contact us on 0800 042 0700 if you would like further legal advice from a member of our team.