A new study by the Institute for Fiscal Studies in the UK indicates that wealthy families pass on wealth or some form of inheritance to their children, while poor families barely do the same – the Financial Times reports.
The report states that only 32% of poor income earners receive inheritance or can expect to receive one, while higher income earners pass on wealth with their children actually expecting to receive inheritances.
To this extent, people born between 1930 and 1950 lived at a time when bequeathing inheritances were possible and common than those born in later years.
One key reason for this is that the value of property and fixed assets has risen dramatically over the years. Senior citizens of 80 years and above in 2002 had property worth £160,000; by 2012, the value of the properties had risen by 45% to reach £230,000.
Another fact is that younger people today expect to receive inheritances than their fathers did many decades ago. For instance, only 38% of people born in the 1930s expected inheritance from their older folks while 75% of those born in the 1970s look forward to family inheritances today.
A third fact is that earnings today are not increasing and it is more difficult to amass property today than in the time of our fathers. Our fathers bought and inherited estates back then because they had little value and were easy to own, the story is quite different today for younger generations of these period. Work earnings are stagnating the hopes and capacity of people to accumulate wealth today.
The only way youths and young men of today can hope to receive any inheritance is if their parents or older family members fall within the few higher income earners of the society. And where children of low income earners hope for or even manage to secure any inheritance from their old folks, the total value of such inheritance will be significantly smaller compared to the larger ones children of higher earners would receive.