Intergenerational wealth transfers, either in the form of inheritance after death or via gift transfers, are continually increasing.

The number of inheritances and financial gifts taking place each year in the UK is increasing and predicted to continue to grow substantially. This is due in part to the ageing population and increasing wealth. HM Revenue & Customs collected £5 billion in Inheritance Tax (IHT) in January 2022, which is up by £700 million from the same period a year earlier. The rise in IHT receipts is likely due to increases in wealth, including higher property prices, as well as the rise in inflation.

Our ‘Wealth Transfer in the UK: the continuing story of the inheritance economy’ research paper, provides new insights into an area of growing importance to the UK economy – intergenerational wealth transfers. It follows on from our first Inheritance Economy research paper, ‘Passing on the Pounds’, which identified that £5.5 trillion will pass between generations within the next 30 years. This amount of inheritance is unprecedented and raises both opportunities and threats for the financial services industry.

If you work in the wealth management industry, you’re already likely to be familiar with intergenerational wealth transfers and the associated risks and opportunities that they present to your practice. Although, from my experience, many Financial Advisers have only just scratched the surface and are still unaware of the importance of acting now to retain funds under management upon the death of a client.

Intergenerational wealth transfer is the term used to describe wealth that is passed down from one generation to another. It is one of the greatest opportunities and challenges facing the wealth management industry over the next thirty years. With an ageing population and rising levels of wealth, the UK is set to see substantial growth in the number of inheritance transfers and financial gifts taking place each year. We've created an intergenerational wealth transfer infographic to highlight some of the key statistics and opportunities for the financial services industry. Let's take a look...