Advertisement
For £35 you can help a vendor keep themselves warm, dry, fed, earning and progressing
BUY A VENDOR SUPPORT KIT
Social Justice

Rich-poor divide set to widen in next 20 years as value of inheritance rockets

Fewer than one in three people will benefit from an inheritance - and the highest earners are twice as likely to do so.

Image: Unsplash / Johnny Cohen

The divide between rich and poor will widen further over the next 20 years as the value of inheritance doubles, new research shows.

Around a third of people can expect to benefit from a big inheritance windfall, thinktank the Resolution Foundation has found, with the highest earners in society twice as likely to do so than the lowest.

Inheritances is becoming increasingly relied upon as a way to in to home ownership – with just one in 12 people aged 25 to 34 having sufficient savings to afford a standard deposit on the average first-time buyer home in their area.

It has been argued that the decline in homeownership among younger people is not a long-term problem because inheritances will allow them to eventually buy a home. Yet the typical age when 20- to 35-year-olds are projected to receive an inheritance is 61, according to the new research. 

Demand for houses and a continuing low supply has caused house prices to rise at the fastest annual pace for a January in 17 years, according to lender Nationwide.

“A 10 per cent deposit on a typical first-time buyer home is now equivalent to 56 per cent of total gross annual earnings, a record high,” said Robert Gardner, the building society’s chief economist.

Advertisement
Advertisement

The likelihood that an individual will receive an inheritance is twice as high if they are in the richest fifth of earners compared to the poorest fifth, the Resolution Foundation report found, further exacerbating the divide between rich and poor and adding “significant amounts of luck into younger generations’ living standards.”

“A boom in household wealth over recent decades has led to expectations of a huge inheritance windfall. But inheritances go to too few – and too late – to resolve Britain’s youth home ownership crisis, with just a third of people having received or expecting to receive an inheritance,” said Jack Leslie, senior economist at the Resolution Foundation. 

“These wealth transfers often have a significant impact on the lives of recipients, enabling 1.6 million households to own a property that they wouldn’t have been able to otherwise. But with the highest-income families twice as likely to be recipients as the lowest, the benefits are far from evenly distributed.”

Advertisement

Change a vendor's life this Christmas

This Christmas, 3.8 million people across the UK will be facing extreme poverty. Thousands of those struggling will turn to selling the Big Issue as a vital source of income - they need your support to earn and lift themselves out of poverty.

Recommended for you

View all
Winter fuel benefit cuts will send pensioners to hospital, DWP warned: 'It's a political choice'
a view from above of an older person with white hair eating out of a pot
Winter fuel payment

Winter fuel benefit cuts will send pensioners to hospital, DWP warned: 'It's a political choice'

Ghosts star Charlotte Ritchie: 'It's a tragedy people can't afford their essentials'
Charlotte Ritchie at Trussell food bank
Food banks

Ghosts star Charlotte Ritchie: 'It's a tragedy people can't afford their essentials'

Is the cost of living crisis over and will prices in the UK ever come down?
Cost of living crisis

Is the cost of living crisis over and will prices in the UK ever come down?

'This cannot go on': Hundreds of thousands of people turning to food banks for the first time
food bank
Food banks

'This cannot go on': Hundreds of thousands of people turning to food banks for the first time

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Cost of living payment 2024: Where to get help now the scheme is over
next dwp cost of living payment 2023
3.

Cost of living payment 2024: Where to get help now the scheme is over

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know
4.

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know