Inheritance levels double for children of the Eighties

AVERAGE inheritance for people born in the Eighties is twice that of those born in the Sixties, as baby boomers pass on the benefits of property price rises to their children, says the Institute for Fiscal Studies.

The think-tank found the median inheritance had risen from £66,000 for those born in the Sixties to £107,000 for those born in the Seventies and £136,000 for those born in the Eighties. Incomes have barely risen for young adults compared with previous generations, which means that inheritance accounts on average for more than a seventh (14 per cent) of the lifetime earnings of someone born in the Eighties, compared with just eight per cent for a person born in the Sixties.

David Starrock, senior research fellow, said the trend resulted from a combination of the property boom and stagnation in earnings growth.

“Parents of those born in the Eighties versus the Sixties are more likely to own homes and more likely to have a second home and have experienced the big property price boom through the Nineties and Noughties,” he said. “On the flip side, you have the parlous performance of earnings growth hitting the younger generations. Those born in the Eighties are not going to earn any more than the Seventies-born generation over their lifetimes. The normal pattern of earnings growth is stagnating and with Covid that is only going to get worse.”

The inheritance of a third of those born in the Eighties will represent the equivalent of 10 years’ salary, based on average earnings for that generation.

That compares with just a sixth of those born in the Sixties.