This is a frightening statistic when you learn that 35 per cent of women and 24 per cent of men born in 2015 will develop dementia and that the average cost of a care home in 2020 was £34,944.
How is household wealth changing?
It is estimated that the Baby Boomer generation controls around 80 per cent of UK private wealth and property is expected to account for 70 per cent of transferred wealth.
Total net financial worth held by households saw an increase of 172 per cent between 1995-2015 from £1.6tn to £4.3 trillion, and IHT receipts totalled £5.2bn in 2019-20, the highest ever having more than doubled since 2009-10.
There is an estimated £1.2tn in existing wealth assets with an estimated £1.2tn invested in Defined Benefit schemes, with Defined Contribution Schemes predicted to accumulate more than £1.25tn within the next 10 years.
More recently, Bank of England data shows that household cash deposits now stand at £1.6tn and grew by a staggering £124bn between Jan – Nov 2020 as a result of households saving 26.5 per cent of their disposable income – an all-time record.
In fact, according to Moody’s, if consumers spend about a third of their excess savings, they would boost global output by just over 2 percentage points both this year and next.
What are we learning about families?
Divorce rates and complex family formations are on the rise along with the ever-increasing cross-generational client needs.
The number of people getting married age 65+ has increased by 46 per cent in the last 10 years (92 per cent were divorcees), and in terms of will planning, there was a threefold increase in the number of people who made a will last year compared with 2019. People are now keener to set up LPAs, check their life cover and have a plan in place to pass wealth down to the next generation.
What effect is the Great Wealth Transfer having on attitudes towards engaging with financial planners?
From what the statistics are showing – huge. The 55+ age group are keen for the next generation to engage with advisers, with 76 per cent of people wanting to engage when they inherit, highlighting the recurring theme of bloodlines and the desire to retain control and influence. Unfortunately, 70 per cent of women leave their financial adviser within one year of their partner dying and although there is still a larger proportion of inheritors who choose to use their parents’ adviser when they inherit, a third choose to go elsewhere.
How is the Great Wealth Transfer impacting on the industry?
