Millennials will inherit the earth ... only as pensioners

MILLENNIALS are set for an impressive property inheritance, but half of them will be near pensionable age before they can collect it, analysis shows.

People in their 20s and early 30s will enjoy the largest and most wide-reaching “inheritance boom” of any postwar generation, with two-thirds inheriting property wealth, according to a report by the Resolution Foundation, a think tank.

This compares with just 38 per cent of the baby-boomer generation, more of whose parents tended to live in rented or social accommodation.

However, the age at which people will have lost both their parents is getting higher with those now aged 25-35 expected to be an average of 61 before that happens, according to Resolution Foundation analysis of official data.

It means that although more of them are set to inherit when their parents die, many will only receive the money when they are pensioners.

Baby boomers were born 1946-1965, while millennials were born 1981-2000.

The report found a strong correlation between millennials’ own property wealth and the amount they were likely to inherit from parents, suggesting that the inheritance boom will most benefit millennials who stepped on to the property ladder in their early 20s.

In a further boost for millennials whose parents own large homes, the new inheritance tax housing allowance, which by 2020 will mean that up to £500,000 per adult can be passed on tax-free, could halve their average tax burden in the future.

It will, however, fail to solve the housing woes of members of so-called “Generation Rent”, who do so into their 40s and 50s. This is because those not already on the property ladder by their mid-30s are less likely to inherit large sums from their parents.

Laura Gardiner, Resolution Foundation senior policy analyst, said: “While the millennials have done far less well in accumulating their own assets, they are likely to benefit from an inheritance boom in the decades ahead ... But inheritance is not the silver bullet that will get a whole new generation on the housing ladder or address growing wealth gaps in society.

“Even for those millennials who will receive a bequest, it’s unlikely to come when they’re coupling up, having children and trying to buy a family home, when the extra wealth would be much needed, but as they approach retirement instead.”