Families hoping to leave money for their loved ones may see plans flounder due to a combination of rising household bills, health care costs and high estate tax bills
Families hoping to leave money to loved ones may find their plans floundered by a combination of rising household bills, future health care costs and high estate taxes.
A survey for St James’s Place shows that more than six in ten high net worth individuals believe their ability to pass on wealth is being compromised by double-digit inflation.
More than half also fear that they will have to use part of their long-term savings to cover social care costs.
Claire Trott, an executive at the wealth management firm, says many younger people rely on inheriting money from parents or grandparents.
Of those expecting an inheritance, 40 percent depend on the money to secure their future finances.
Feeling the pressure: Six in 10 high net worth individuals believe their ability to pass on assets is being compromised by double-digit inflation
Although many elderly people struggle to build up wealth in the long term, inheritance tax is also becoming a major problem.
A freeze on the zero-rate threshold of £325,000 since April 2009 – and until April 2028 – means more estates are being dragged into the inheritance tax net.
Revenue for April 2022 to February 2023 was £6.4 billion – £900 million more than the same period 12 months earlier.
Many households try to reduce inheritance bills by giving money away before they die.
But last week Revenue & Customs said it had recovered £700 million from more than 2,000 families after finding them breaching the rules.