A cross-party think tank, Demos, says inheritance is becoming an ever more important aspect of the UK housing market.
In a new report it says that the UK has entered a ‘new age of inheritance’ with annual inheritances and inter-generational gifts in worth over £100 billion annually.
The value of inheritances (adjusted for inflation) passed on annually in the UK has doubled roughly every 20 years since 1979 and is expected to double again in England by 2040.
A typical UK household led by people born in the 1980s is expected to inherit almost £250,000 throughout their lives; that is equivalent to how much such a household would earn, on average, in almost eight years. A typical household led by those born in the 1960s, in contrast, is expected to inherit an amount worth just four years of their average annual earnings.
But inheritances will be distributed highly unevenly: of households led by people born in the 1980s, those with the least wealthy parents (in the bottom fifth) will get a five per cent boost to their lifetime income through inheritance, but those with the wealthiest parents (in the top fifth) will get a 29 per cent boost.
Of households led by people born in the 1980s, those in the top fifth of lifetime incomes are expected to inherit £390,000 throughout their life (in 2018/19 prices), compared to just £148,000 for those in the bottom fifth.
Other disparities include white British people typically receiving over £3,000 in inheritances and gifts during 2016-18, but people in some ethnic minority groups typically receiving nothing.
A typical person in the South of England born in the 1970s is set to inherit around three-and-a-half times as much as a typical person in the North East.
In terms of home ownership, over a quarter of first-time buyers receive financial assistance from their family, helping them get on the housing ladder.
Demos has not yet set out recommendations for how public policy should change to address the issues raised in its research, but says it will do so later in its current research programme.
Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.