A recent story from the Guardian newspaper in Britain. It is about grandparents leaving their wealth to their grandchildren instead of their children, because the grandchildren have now grown up and their children sometimes feel pressured not to pass on their inheritance from their parents directly to their own children. It happens in Britain but does it also happen here?
The “sandwich generation” of 45- to 64-year-olds were the most likely recipients of this wealth, the research found – but about half of grandparents also plan to pass on wealth directly to their grandchildren.
And many people in the middle sandwich generation either want to pass on the inheritance or feel under pressure to hand it to their own adult children – the millennial generation – the research found.
Two-fifths (40%) of 45 to 64-year-olds feel that there is pressure to pass on wealth. Nearly two-thirds (62%) are concerned about the financial position of the younger generation who have not generally seen their wealth increase, due to surging house prices, in the same way that some people in the older generations have.
A recent report from the Institute for Fiscal Studies (IFS) suggested the amount of wealth that younger generations will end up with is more likely to hinge on how well off their parents are than was the case for older generations.
The IFS warned that today’s young adults will find it harder to create their own wealth than previous generations, with implications for social mobility.