A new study carried out by Tower Street Finance has found that the value of estates likely to be left has fallen and 10% of those questioned believe they will not be able to leave anything to their loved ones.
The research also found that with living costs rising, a substantial number of people are relying on future inheritances to pay bills or debts.
Beneficiaries relying on inheritance to help with bills
The study questioned 2,000 individuals and found that 29% would use the money to cover living costs if they were to inherit in the coming 12 months. This is a fourfold increase since 2020, when 7% anticipated using the money to pay living costs.
A substantial number of interviewees are relying on an inheritance to help them onto the property ladder, with 17% of 18-24 year olds and 15% of 24-35 year olds saying this is how they would use money left to them.
The effect of price increases is also likely to reduce the amount left, with 72% saying that although they expect to leave an inheritance, living costs will ‘unquestionably’ reduce the amount in their estate.
The estimated value of an average estate has fallen by over 23% in two years, dropping from £289,000 in 2020 to £221,000 in 2022.
Time taken to wind up an estate
On average, people expected that they would receive their inheritance around eight months after a death, with 36% saying they thought it would take less than 6 months to complete an estate administration. In fact, it generally takes 9-12 months and quite often longer as the probate process can be complex and time-consuming.
Only 41% said they had enough money available to pay for a funeral at an average cost of a funeral and burial in 2021 of £4,927. Some 33% said that they would not be able to cover funeral costs.
Of this third, 35% said they had no idea how or where they would find the money, 15% said they would borrow from relatives and 14% would take out a loan.
Making a Will
Leaving a Will is still vitally important. Without a valid Will, there can be confusion amongst those left behind as to what your wishes were. As well as reducing the risk of disagreements arising, making a Will gives you the chance to structure your estate in the most efficient way possible.
If you would like to speak to one of our expert estate planners, ring us on 01634 353 658 or email us at [email protected]