Four in 10 rely on inheritance despite uncertainty over windfall

More than four in 10 people expecting to receive an inheritance say it will be essential to their financial security, according to new research from Aviva.

The provider’s Intergenerational Wealth Shift report found 43% of those expecting an inheritance deem it essential to their financial security, while 37% say they are financially dependent on receiving it.

However, 60% admit they don’t know how much they will eventually inherit.

Over half (51%) of parents also say they haven’t discussed their inheritance plans with their children, although 31% planned to do so in future.

Just 15% have discussed their plans in detail.

The report also highlighted wider estate planning gaps. Less than a third (32%) of UK adults have an up-to-date will and know where it is kept, while only 13% have a lasting power of attorney in place.

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Lorna Whalley, director of Aviva’s Adviser Platform, said these findings underline the important role advisers play in helping clients prepare for later life and manage expectations around wealth transfer.

She said: “There’s a crucial role for financial advisers within inheritance and estate planning discussions, which goes beyond simply putting the mechanics in place.

“Financial advisers can encourage clients to consider the levels of income they will need in retirement and what contingencies need to be in place.

“A clear understanding of your financial situation and future needs is the building block for open conversations about inheritance and expectations.”

Among those who say inheritance is essential to their financial security, 35% expect to use the money to cover day-to-day living costs, 32% to fund retirement, 29% to pay off debt and 27% to repay a mortgage.

Whalley warned that many people are building financial plans around inheritances without knowing how much they are likely to receive.

She continued: “This uncertainty could prove disastrous for future financial plans and makes it much harder to take steps now to meet future requirements.

“Advisers have an important role in facilitating conversations between clients and their families to help ensure expectations are better understood.”