More than half (53%) would back tax incentives to give money to children, on the condition it is used for major purchases, such a deposit for a first home.
Over-55s are increasingly supportive of giving pre-inheritances to family, as financial support is more useful when relatives are younger, according to research from equity release adviser Key.
Around 45% of over-55s questioned believe making family wait for an inheritance is wrong – especially as the average age of inheritance is 47 years old when most people hope to have already made large purchases like their first home.
More than half (53%) would back tax incentives to give money to children, on the condition it is used for major purchases, such a deposit for a first home.
Key’s study found that this would also be welcomed by under-40s – more than two out of five (41%) questioned have given up on getting on the property ladder without family help and 56% want the government to do more to tackle the intergenerational financial divide.
The research found that the biggest potential threat to pre-inheritance and in-life gifting is over-55s concerns about the cost of care – nearly half of over-55s (46%) feared that funding care in later life will stop them leaving an inheritance.
Funding care was seen as a bigger threat than running out of money to support normal living expenses in retirement – 31% of over-55s said retirement income worries would stop them leaving an inheritance.
Most people did intend to leave an inheritance if they can with two-thirds (66%) wanting to leave money to family or children.
Just 12% said they have no plans to leave money to anyone with 17% intending to leave money to good causes.
Will Hale, CEO at Key, said: “While the recent budget did not tackle this issue, both the older and younger generations are keen to see more support for choices that promote intergenerational fairness.
"Indeed, while the over-55 know that they need to consider their own retirement finances and potential care costs, they also want to help children and grandchildren financially.
“A pre-inheritance which contributes towards university fees, a first home or a dream wedding can make a huge difference and – in the case of equity release - puts money back into the economy that might otherwise have sat trapped in bricks and mortar.
"Whether that should be formalised with tax incentives is another question but clearly the decision to increase National Insurance partially to help fund social care attracted some criticism on being unfair to younger generations and a tax incentive around encouraging pre-inheritance in certain circumstances might help balance it.
“When thinking about leaving a pre-inheritance, the best place to start is often by having a discussion with an independent financial adviser who will help you ascertain how you can do this without negatively impacting your financial stability.
"They may suggest using your savings, investments or housing equity as these can all be potential sources of a pre-inheritance for your family.”
