New research into gifting behaviour has found that parents want to give away early inheritance gifts to help their children financially now rather than making them wait.
The study, by Key Retirement, revealed that more than half (53%) of parents plan to make major financial gifts to their children, with an average target of £15,000 per child, while more one in ten (11%) expect to give over £25,000 in gifts to each child.
Around 54% plan to fund the pay-outs through their savings, but increasingly over-55s are looking to release cash from their home to help out family. The study shows more than a fifth (22%) of those not wishing, or able, to use savings would use equity release to fund their gifts.
The research found strong support for tax breaks on living inheritance, with 37% of parents and grandparents saying they would gift a living inheritance if the Government provided tax breaks. Key Retirement believes encouraging intergenerational gifting for major life purchases through tax breaks could play a major role in tackling intergenerational wealth issues.
“The financial squeeze on younger generations and the struggle they face in saving for homes and paying off student debt are major problems,” said Dean Mirfin, technical director at Key Retirement. “It is clear parents and grandparents want to help and are already doing a lot to make gifts with more than half planning major handouts.”
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