Many young Brits are not saving for their retirement because they believe they will inherit money from their parents- but many are in for a big disappointment, according to a new survey.
Skipton Building Society found that 75% of people aged between 20 and 35 are hoping to get a nest egg when their parents pass away and the average expectation is that the sum will be £78,000.
The survey found that a fifth of those aged over 20 believe their parents will leave them enough money to solve all of their future money problems to the extent that they have shelved all of their own financial plans.
However, many of them – around 40% – won’t get a penny.
The fact is that many parents have already been forced to dip into their cash savings to get by.
Dipping into savings
In addition, around 40% of parents have already giving their children hand-outs to help pay for driving lessons, university fees and rent.
Stacey Stothard, the communications manager at the building society, said: “To rest financial hopes on their parents’ wealth and assuming that it will all be theirs is a high risk strategy by many people.”
She added that the ongoing economic conditions mean that when times are financially tough for younger people, then they’re also tough for their parents as well.
She said that parents have had to increasingly keep dipping into their savings to get by and rather than see their children struggle financially they have been handing over more money while they’re alive and well.
This will obviously impact on any inheritance to be handed down in years to come.
Stacey added: “These children are sleepwalking towards a financial nightmare if they are basing all of their financial plans on something they may never receive.”
The survey also revealed that 68% of children are expecting to inherit their parents’ house and 32% believe they’ll get a car.
In addition, 67% remain convinced that they’ll be handed a huge amount of cash which means that 54% are not bothering to plan for their own comfortable retirement and plan to use their parents’ money instead.
To underline this belief that an inheritance will resolve all the young person’s money problems, 20% confessed that they were hoping that an inheritance would get them out there and the same number said they would use the money to get on to the property ladder.
Of those respondents already on the property ladder, 25% aged between 20 and 35 said they would use their inheritance to pay off a mortgage while 15% would save the money to put their own children through university.