Britons rely on inheritance for retirement income

More than a third of British workers will need a boost from inheritance to provide a stable retirement income, research by LV= has found.

The survey of more than 2,000 British workers and retirees found that 35% of respondents hope that inheritance will provide enough financial support to allow them to live comfortably in retirement.

However, many are pinning all their retirement plans on being left an inheritance, with 20% saying they wouldn’t be able to have a comfortable retirement without it.

Many respondents said that they weren’t planning on providing inheritance to their children, with a fifth saying they would rather spend the money on enjoying their retirement rather than leave it behind.

Common things people intend to use inheritance for include:

  • paying off an outstanding mortgage
  • clearing other outstanding debts
  • just 16% say they would use inheritance to contribute to their retirement income.

Those hoping to maximise any potential inheritance windfall will likely welcome the Chancellor’s Summer Budget announcement that the inheritance tax threshold will effectively be raised to £1 million for home-owning couples by 2020.

John Perks, managing director at LV= Retirement Solutions, said:

“People now spend almost as long in retirement as they do in the workplace, so it’s worrying to see that many people say they are reliant on something essentially out of their control to provide them with a comfortable retirement.

“With all the everyday demands on our time, retirement planning is often at the bottom of the to-do list, but it is important that people take steps to secure themselves the lifestyle they hope for in retirement. We would encourage people approaching retirement to seek advice to get the most out of their pension savings.”