Parents and grandparents are worried Britain’s exit from the EU could impact badly on their wealth.
A report on intergenerational wealth transfers found 30 per cent of people belonging to these generations are concerned about Brexit and the effect it could have on their children’s financial security.
The only other concern trumping this was the difficulty for their children in getting on the property ladder, which 37 per cent were worried about.
The attitude was mirrored by the younger generation, with 38 per cent of 25 to 45-year-olds stating Brexit will impact their financial security.
The report, which will be published by Sanlam UK next week (29 June), surveyed three different cohorts in April this year: the over-55s with investable assets of £100,000; people aged between 25 and 45-years-old who are expecting to receive at least £50,000 in inheritance; and 200 UK-based independent financial advisers.
Tomorrow marks the second anniversary of the historic referendum on EU membership and many Britons’ concerns stem from uncertainty and the lack of detail spelled out by the government around the process so far.
Philip Smeaton, chief investment officer at Sanlam UK, said: “The Brexit process so far has been typified by uncertainty.
“Two years on since the vote to leave the European Union – and with just over half a year to go to the leave date of 29 March – we are still no clearer on what kind of deal the United Kingdom and remaining members of the European Union will strike.
“From a political standpoint, it’s not really clear what kind of Brexit the government are pushing for. And this is one of the central concerns for many of our clients, who often tells us that a lack of clarity on Brexit tops the list of concerns they have for their future financial security.”
It is still unclear whether the government will be opting for a ‘hard Brexit’, or to stay within the single market and customs union. A third option would be a ‘no-deal Brexit’.
The chancellor last night (21 June) used his annual Mansion House speech to spell out the direction of travel for financial services after Brexit, vowing that Britain would remain open for global business.
He said the government has launched a number of initiatives to ensure London’s place in global finance, including a global partnerships strategy and new initiatives around retaining skilled workers and building a centre for green investment.
Regardless of the uncertainty, economically, Brexit does not seem to have impacted the UK particularly badly so far.
There has been higher inflation and a weaker sterling but the economic picture does not look as bleak as many had predicted in the lead-up to the vote in 2016.
Despite this, 34 per cent of young people consider Brexit to be a higher risk to their wealth now and in the future than they do an opportunity (13 per cent), Sanlam found.
A similar picture was painted for IFAs with 40 per cent saying they considered Brexit a threat, 32 per cent saying it was an opportunity, and 28 per cent undecided.
Paul Stocks, financial services director at Dobson & Hodge, said Brexit was on top of many clients’ list of questions but he didn’t think they were overly concerned about its impact.
He said: “Brexit in the long term will be whatever it is – good or bad – however, asset prices will absorb the impact and a diverse investment strategy and sensible ‘cash buffer’ management should enable the impact to be managed.
“I wouldn’t say that anyone has said to me that they are specifically concerned as to the impact Brexit will have, any more than they asked about it before the vote, before Trump was elected, before the most recent UK general election etc.
“I think the issue is, it’s rumbling on, constantly on the news and social media and therefore it’s no surprise is is seemingly weighing heavily on some.”
carmen.reichman@ft.com
