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Beneficiaries kept ‘in the dark’ on inheritance

15 May 2019

The majority of beneficiaries remain in the dark over how much money they are set to inherit amid ongoing uncertainty over the amount of money needed to fund retirement, new research from Canada Life has shown.

Two-thirds (63%) of over-45s have not told their beneficiaries what they will pass to them, with one of the largest concerns that they use up all their assets to fund their later years leaving them unable to set aside inheritance.

Two in five (39%) expressed concern about this potential scenario, while a similar proportion (40%) were concerned they will not have enough pension saved to cover their retirement.  Meanwhile, nearly a third (30%) were worried about giving away funds to family members that they may come to need later in life.

As a result, it looks likely that beneficiaries will inherit less than they may have hoped for. Two thirds (63%) of over-45s plan to leave only what is left, while 16% will leave nothing and spend everything to fund their own retirement. Interestingly, over a third (35%) of those passing on an inheritance believe their beneficiaries will use at least a part of their assets to fund their own retirement.

Neil Jones, wealth management and tax specialist, Canada Life, said of the findings: “There is a clear disconnect among over-45s between their desire to leave something behind to their beneficiaries and the need to fund their own retirement. It seems that many are losing the battle, acknowledging they don’t know how much they’ll be able to leave behind to the next generation.

“It appears that many people over the age of 45 may not have clarity on their finances – what they need in later life and what they can set aside for their children, grandchildren and loved ones.”

Professional Paraplanner