Just 5% of Boomers intend to spend their money, so don't expect an inheritance

Spending time with loved ones and traveling are more important than inheritances, even for those with the highest household incomes

Family members who were expecting an inheritance might be let down. A survey found that the overwhelming majority of Baby Boomers do not prioritize leaving money behind.

The Great Wealth Transfer, as it is being called, is predicted to transfer trillions of dollars from Baby Boomers in the US, Europe, and developed Asia to younger generations over the course of the next several decades.

It is anticipated that over the next 30 years, assets valued at over 5 trillion will be transferred in the UK. In particular, Generation Z and Millennials anticipate receiving bigger inheritances earlier in life.

Their grandparents and British Baby Boomer parents, however, have different opinions. Only 20% of respondents between the ages of 60 and 78 stated that leaving an inheritance was one of their top five retirement objectives; the majority instead intended to use their pensions for personal expenses.

Can I expect to inherit anything?

Even among the oldest members of this group, those between the ages of 70 and 78, and those with the highest household incomes (over £100,000), only roughly 25% rank leaving cash as one of their top priorities, despite the fact that it may be a means of avoiding inheritance tax.

Instead, traveling the world and spending time with loved ones topped their list of priorities.

In retirement, almost half (46 percent) stated that spending time with loved ones was a top priority. The next most popular travel destinations were overseas (37 percent), the UK (36 percent), and pursuing new interests and pastimes (34 percent).

However, a sizable minority also selected assisting children and grandchildren with their financial needs (18 percent), which is sometimes referred to as a living inheritance.

The results are a component of Just Group's comprehensive consumer insight program, GenVoices, which focuses on retirement.

According to Stephen Lowe, group communications director at Just Group, "While estate and inheritance taxes are popular subjects, the majority of Baby Boomers do not prioritize leaving money for retirement, according to the research.

Overall, it appears that most people would rather unwind and spend time with friends, family, travel, and hobbies than pursue other options like volunteering, part-time employment, starting their own business, or going to school.

While Baby Boomers are frequently regarded as the wealthiest generation, research indicates that the majority of this group is aware that their resources are limited and will primarily be depleted over the course of their remaining years.

Taking early pension payments.

Separate data revealed that last year saw a post-pandemic high in the number of people taking early lump-sum pension withdrawals as soon as possible. According to experts, the trend will pick up speed before future changes to the inheritance tax rule.

According to Lubbock Fine Wealth Management's Freedom of Information request to HMRC, 120,000 people took a lump sum payment from their pensions at the age of 55 last year, an increase of 10% from 2023.

People between the ages of 55 and 56 may run out of money later in life, as the total value of those lump sum withdrawals reached a five-year high of £2.02 billion in the year ending March 31, 2024, up 10% from £2 billion.

Boomers exhibited a hesitancy to downsize elsewhere in the Just study. While 20% of current homeowners stated they wanted to remodel their own house, only 3% said they planned to purchase a new primary residence. 4% of renters desired to purchase a home.

Although roughly 70% of this group owns their homes, one in seven of them still owe money on their mortgages, according to Lowe. As time goes on, many non-homeowners will have to pay increasing rent.

"The general idea that Boomers are awash with dosh is challenged by the fact that the wealthier tiers are highly comfortable. According to the facts, the majority of Baby Boomers will need to manage their money carefully and likely believe that leaving money is a wish rather than a requirement," he continued.