Intergenerational Planning: What is it and how can it be used?

The difference in wealth between the young and the old has never been more apparent. This ‘wealth gap’ is fuelled by things like the rising cost of renting and home ownership, high university tuition fees and the high cost of living. In contrast, older generations have benefited from generous final salary pensions and big increases in stock and housing markets over the last three decades. This generational disparity is most striking in the housing market, where people aged over 50 own 78 percent of the UK’s total private housing wealth, amounting to a net value of £2.587 trillion.

As a result, it’s perhaps natural for grandparents to want to help out younger family members by passing down their wealth. In fact, a study by Imperial College London estimates the current flow of bequests to be around £99 billion per year, plus another £11 billion in private gifts between generations.

Family structures are arguably more complex than they used to be though. In cases of divorce and remarriage, cohabitation and stepchildren, assumptions about who you leave your money to and how, could lead to unintended consequences. Without a clear will, there’s a risk of leaving your family with disagreement and lots of upset, rather than a positive legacy.

At Amber River, our IFAs work with you to create a comprehensive estate plan, including the use of wills and trusts where necessary. We guide you through the tax implications of gifting while you’re still alive and on your death. Our experts will clarify the process, demystify any jargon, and ensure your money benefits those you intend it to.