Intergenerational rapport fair?

Intergenerational wealth transfers and the effect on UK families

Intergenerational wealth transfers – both gifts and inheritances – have increasingly become a major feature of UK economic life. These wealth transfers have major impacts on how people live their lives and the opportunities available to them. This report draws on a series of focus groups, a newly commissioned survey of UK adults, and statistical analysis to understand the effects wealth transfers have on the recipients and on those giving transfers.

Our findings highlight how important wealth transfers are in opening up opportunities for recipients in the housing market and improving financial resilience. But the benefits are not felt equally: high-income families are twice as likely to receive transfers as low-income families. Equally, those providing wealth to younger generations are also impacted, with increased saving and downsizing homes a common action taken by those hoping to give.

It is crucial for policy makers to understand the role intergenerational wealth transfers play in shaping the lives of families across the UK, especially as rising wealth levels and an ageing population are only going to increase the flow of the transfers in the coming decades.