Young Brits fear inheriting debt

Seven in 10 young Brits most fear inheriting a mountain of debt when their parents pass away, AA Legal Services reveals.

Its research shows that recent changes to Inheritance Tax hold little appeal for millions of young home owners.

At a time when young people are being offered up to 6 x their salary to get on the property ladder, many fear their elderly parents will spend their inheritance during their twilight years – instead, leaving them a legacy of debt when they die.

AA Legal Services commissioned a survey among 2,600 elderly parents and adult children to explore attitudes towards inheritance. The findings suggested a lack of communication is causing tension and division within the family unit.

More than four in five people under the age of 35 expressed concerns about what may emerge from their parent’s will.

Beyond the prospect of having debts to pay, perhaps as a result of care costs or equity release schemes, around one in three were concerned about the prospect of sibling rivalry – fearing they wouldn’t get the same deal as their brothers and sisters.

Some of the children’s fears proved to be well founded.

Money being left to a charity or to a step parent were actions that would irritate children (15% and 10% respectively) but were plans that parents had actually made.

In some instances, poor family communication is fanning the flames.

Around three in 10 parents over the age of 55 have not yet told their children about their will – and 14% have no intention of sharing the contents of their will before they die.

Alarmingly, whilst most adult children worry about what they will or won’t inherit, few of them have actually made a will themselves.

Only one in five couples with children under the age of 11 say they have made a will.

James Molloy, head of AA Legal Services, says: “Recent concern over the cost of care homes, equity release schemes and growing consumer debt among the elderly are changing the way many young people view the concept of inheritance.

“As young families take on bigger and bigger debts to get a foot on the property ladder, few are banking on a future inheritance to help clear the mortgage.

“It is also alarming that so few young couples have made a will.

“On buying a home it should be one of the first tasks that is undertaken, but our research is telling us that writing a will is usually lost in the excitement of choosing new carpets and opening the tin of magnolia paint.”

source: mortgagestrategy.co.uk