A new report has highlighted the extent of the pensions and savings gap in the UK, with many adults failing to save enough money to provide for a comfortable retirement.
According to the report, one possible solution is to bring about an urgent change in attitudes towards inheritance planning, with a focus on the earlier transfer of wealth to younger generations.
The report was prepared by wealth management firm Brewin Dolphin, together with think tank Centre for Economics and Business Research. The two organisations have called on the Government to consider new tax incentives to encourage this early transfer of wealth by the older generation.
“The harsh reality that this country faces, is that the outgoing ‘Baby Boomer’ generation will be the last to enjoy a comfortable retirement unless urgent action is taken now,” explained Liz Alley, from Brewin Dolphin. “We are calling for older people to fundamentally rethink how and when they pass on their wealth to younger relatives. The solutions we are proposing today are based on earlier and regular gifting as part of a strategic financial plan, rather than focusing on a one-off inheritance. This could help set grandchildren up for life as well as reduce inheritance tax.”
“Our findings show that whilst we may be a challenged nation when it comes to savings, we are also a generous one when it comes to passing on wealth,” she added. “However, often this wealth is being transferred in an inefficient way. Only a small percentage of people have thought beyond one-off gifting with their inheritance planning. A huge difference could be made by making regular contributions to a grandchild now via a JISA or pension.”
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