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.