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Millennials banking on expected inheritance

28 Mar 2018

Two thirds of millennials hoping to inherit from their parents

  • Three quarters not currently saving on a regular basis

New research from first direct has found two thirds (66%) of millennials expect to inherit financially from their parents, and many are banking on this windfall to help pay off their debts. 

The survey of 2,000 18-32 year olds found 43% are planning to use any money they receive to pay off their debts, and over a third (34%) admitted they’re not saving due to the size of the windfall they expect to receive.

Retirement expectations

While 42% of millennials said they’d rather their parents spent any potential inheritance on themselves, the research discovered the average amount millennials believe they’ll receive as inheritance is just over £80,000.

Despite this, there’s an understanding any windfall won’t mean they can retire early, as 41% don’t expect to be able to retire before the age of 65.

Savings crisis

The research reinforces the impact of financial pressures faced by this generation, as first direct ’s Quarter Life Catalyst Report found financial difficulties are the biggest single cause of quarter-life crisis, with more than half (53%) of people going through a Quarter Life Crisis admitting they spend more than they earn each month.

Three quarters (75%) of millennials report that they’re not currently saving on a regular basis, but almost half (46%) said one of their short-term goals is to begin saving on a regular basis in the next five years.

Nick Harrison, Head of Products at first direct , said: “With three out of four millennials not currently saving on a regular basis and only one in two hoping to start saving in the next five years it’s no wonder financial difficulties are a major cause of quarter life crises.  Rather than an inheritance, the best way to plan for your financial future is to prioritise regular saving. Saving even small amounts at first, can make a big difference to financial wellbeing, and setting goals or putting money into ‘buckets’ such as ‘debts’, ‘deposit’, or even ‘holiday’ can quickly add up.”

first direct ’s goal is always to make banking as easy and as human as possible, and we’ll keep pushing the boundaries for the benefit of our customers. This is why we’re pioneering the artha app which analyses people’s needs and helps them find relevant financial products and save money.”

artha by first direct is a six month pilot, which provides consumers with an integrated offering of financial services products and tools from across the market, including those from other providers where appropriate*.It’s the first time a large financial institution in the UK has made third party products available for the benefit of customers, and forms a key part of HSBC UK’s Open Banking strategy.

first direct also offers customers a number of savings accounts from the Regular Saver which offers a fixed rate of 5.00% AER (gross 5.00% pa), to the Cash ISA where you can earn 0.75% AER (0.75% tax-free) variable.

Key stats:

  • Over a third of millennials are not currently saving for retirement

  • A fifth of millennials have no plans to start a pension at all

  • Nearly a fifth (19%) say saving isn’t important to them due to the size of their future inheritance

  • Over a third said that they think their inheritance is going to be life changing and it will also make them financially secure (34%)

  • A fifth (20%) said their future lifestyle depends on their heritance

  • Nearly a third (29%) would rather have their inheritance now rather than having to wait

  • A fifth (20%) are wary of their parents spending habits as they think it will damage their inheritance package

  • 43% of millennials are planning on using their inheritance to pay off their debts

  • Nearly a quarter (24%) think their inheritance is going to allow them to retire earlier 

    Regional figures:

  • Most likely to rely on family inheritance: Wales (26%), North East (24%), Scotland (23%)

  • Least likely to rely on family inheritance: Northern Ireland (77%), North West (72%), South East (70%)

  • Most likely to think they’ll receive an inheritance from relatives: South East (43%), Northern Ireland (41%), Wales (41%)

  • Least likely to think they’ll receive an inheritance from relatives: North East (42%), Scotland (42%), North West (41%)


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