Later Life  

Inheritance gives Gen-X a chance to save for later life

Inheritance gives Gen-X a chance to save for later life

Inheriting a 'windfall sum' has been cited as one of the key means by which Generation X - the so-called 'squeezed middle' - can ease their financial burdens and realise their goals.

Research from digital wealth manager Moneyfarm also showed that, when it comes to wealth planning, those aged 40 to 50 need to be making the most of their savings now to achieve their later-life goals.

According to the research, which was carried out for Moneyfarm by Censuswide among 2,109 respondents aged 35 and over, 30 per cent admitted they had not been saving for their retirement at all.

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In particular, family pressures were cited as the reason why 19 per cent of people could not save more. Among the older cohort of 55-year-olds, the average spend on supporting family members was £8,000 less at 55 than it was at 35.

This represented a missed opportunity, said Anjali Sarin, head of UK at Moneyfarm. According to Ms Sarin, if the 'mid-lifers' reallocated that additional £8,000 to a self-invested personal pension, for example, the investor could "begin to make big strides towards achieving their retirement goals.

"For instance, those aged 45 looking to retire at 66 could benefit from extra income in retirement of up to £9,831 a year by investing the money saved from family members becoming less financially dependent in Moneyfarm’s P7 portfolio", she added.

Moreover, as the older generation leaves wealth and assets to mid-lifers, Moneyfarm said this was a further opportunity for the 'squeezed middle' to start saving more and make the most of any transfer of assets. 

According to the latest data from the Office for National Statistics, inheritances received by those in the lowest wealth quintile made up 44 per cent of their net total wealth.