Significant numbers of working-age people are intending to live off their family inheritance after they retire, according to research from HSBC. The global survey – The Future of Retirement: Life After Work? – found that 72 per cent of respondents who expected to receive an inheritance planned to use it to finance their retirement to some extent. One in ten anticipated that it would be their sole source of retirement income.
You can’t predict what may happen between now and receiving an inheritance. The earlier you start preparing, the more financially secure your own retirement is likely to be
Group Head of Wealth Management, HSBC
The report also revealed that people may be surprised by unexpected legacies. While only 43 per cent of non-retirees believed they would receive an inheritance, 69 per cent of retirees planned to leave one to their children, with an average value of USD148,205.
However, Simon Williams, Group Head of Wealth Management at HSBC, warned of the risks of relying on potential windfalls to finance retirement. “Parents may face their own unexpected hurdles and require the money to fund other things, such as their own medical and nursing care, in later life,” he said. “You can’t predict what may happen between now and receiving an inheritance. The earlier you start preparing, the more financially secure your own retirement is likely to be.”
Many people are also choosing to pass wealth to relatives during their lifetime. The research – which surveyed more than 16,000 people in 15 countries – found that 38 per cent of working-age people had already received significant loans or financial gifts from their family, with an average value of USD13,059.
There were also some significant geographical disparities. Retirees in India (86 per cent) and Mexico (84 per cent) were most likely to leave an inheritance, compared with 56 per cent in the USA and 57 per cent in Canada. The average (median) expected value of a legacy varied from USD501,919 in Australia and USD370,966 in Singapore to USD47,775 in India and USD38,814 in Malaysia.