A report from insurer Aviva found that more than one in three adults (37%) say they are financially dependent on receiving an inheritance. However, three in five (60%) admitted they do not know how much money they are likely to inherit, raising concerns that many people could be making important financial decisions based on assumptions rather than certainty.
Rising costs fuel reliance on inherited wealth
The report findings come at a time when rising housing costs, higher household bills and increased pressure on retirement finances are leaving more people looking to inherited wealth to help secure their future. Among those expecting to receive an inheritance, almost a third (32%) said they plan to use the money to fund their own retirement, while 35 per cent said it would help cover day-to-day living costs.
Nearly three in 10 (29%) expect to use an inheritance to pay off debts, while 27 per cent would use it to clear their mortgage. Around a quarter (24%) said it would help them move home and one in five plan to use inherited money to fund their own or their children's education.
Lack of family discussions
Aviva said the findings suggest many households are building future financial plans around money they cannot accurately predict. Lorna Whalley, director of Aviva's Adviser Platform, said: "The research shows that there is an absence of family discussions around inheritance and expectations which could have repercussions, especially when considering how much potential beneficiaries are relying on inherited money to fund their day-to-day expenses."
"Even though situations can change, it's important for people to consider the levels of income they will need in retirement, what contingencies need to be in place and, as a result, be clearer with beneficiaries about what they can expect to receive." More than half of people (53%) say they don't know how much money they will need to support themselves through retirement.
Wills and Power of Attorney
The report also highlights wider concerns about later-life planning. Less than a third (32%) of adults said they have an up-to-date will and know where it is kept. A further 7 per cent said their will is current but they do not know where it is, while one in ten admitted their will is out of date.
Despite the importance of planning ahead, only 13% of adults have a Power of Attorney in place. The figure rises to 17 per cent among people aged between 65 and 74, and 33 per cent for those aged 75 and over. The research also found that conversations about inheritance remain uncommon, with one in five people saying they do not plan to discuss their inheritance arrangements with their children.
Ms Whalley added: "People are relying on inherited wealth to fund essential parts of their lives, but many have no idea how much they are likely to receive. This uncertainty could prove disastrous for future financial plans and makes it much harder to take steps now to meet future requirements. Even if these conversations feel awkward, people could consider using neutral third parties, such as a trusted financial adviser, to facilitate family conversations, to help ensure expectations are better understood."
