14 February 2011

Seven in ten (71%) wealthier parents are not prepared to make any sacrifice in their
standard of living in order to provide their children with an inheritance, according to a
new study commissioned by Heartwood Wealth.(1)

Although three quarters of parents (74%) aspire to leave their children better off than
they were, the research suggests that most intend to avoid making personal sacrifices
along the way to achieving this.

When it comes to deciding on how to divide an inheritance, the vast majority (92%) of
parents intend to do so equally between their children with only 4% planning to allocate
it according to their needs.

Heartwood’s study shows that the majority of parents (66%) would, if they had the
choice, leave their children a large enough inheritance to give them a start in life, but
not so much that they would be put off working. Only 4% of parents plan not to leave
any inheritance, expecting their children to support themselves fully.

Regionally, parents in the East Midlands are most likely to spend their kids’ inheritance
with 85% shunning any lifestyle sacrifice; parents in the East of England are the most
altruistic, with one in four (39%) prepared to live more modestly in order to leave more
for their offspring.

“The study suggests that parents aim to leave their kids better off than they were
themselves but there are limits on how far they’re prepared to go to achieve this. While
house price rises have ensured that average inheritances have grown in recent years, it’s
likely that this trend will come under increasing pressure and many parents may find
they’re unable to deliver on their intentions.

“Our own experience with clients reflects the findings of this study: parents see the
purpose of an inheritance as being to provide their kids with a leg-up in life so as to help
with costly items such as house deposits. But the promise of an inheritance shouldn’t
make them feel too comfortable and therefore discourage them from earning their own
money.”

(1) Bespoke survey by Opinium Research, 1,041 UK adults aged 45+ of social grade A or B, survey conducted 22-25 November 2010