Some people do not intend to leave an inheritance at all
Many people are relying on an inheritance rather than savings to fund their retirement, according to a new report commissioned by HSBC.
The study – The Future of Retirement Choices for later life – surveyed more than 16,000 people in 15 countries and territories. It found that 51 per cent of working-age people expected to receive an inheritance, with two-thirds of this group planning to use it to help fund their retirement.
People’s ability to leave a legacy is becoming more uncertain because of increasing life expectancies
However, people’s ability to leave a legacy is becoming more uncertain because of increasing life expectancies. The report found that while 74 per cent of working-age people said they planned to leave an inheritance, only 29 per cent definitely expect to do so.
The report also highlighted other factors reducing the likelihood of leaving or receiving an inheritance. It found that many retirees were sharing wealth during their lifetime. Three in five provided regular financial support to family and friends, with 22 per cent giving money to their grown-up children.
Some people do not intend to leave an inheritance at all. One in five (21 per cent) of working-age people agreed that it was better to spend all your money and let the next generation create its own wealth. People in Hong Kong, Canada, the United Kingdom and Australia were most likely to adopt this approach, while those in Indonesia, Taiwan, Malaysia, the United Arab Emirates and Mexico were more inclined to prioritise saving.
Charlie Nunn, Group Head of Wealth Management, HSBC, said: “It is essential that people of all ages prepare for later life. Even the smallest amount saved today can contribute towards the lifestyle you want in retirement and the legacy you hope to leave. Those who fail to plan may find any kind of inheritance and a comfortable retirement are beyond reach.”
The report highlighted four steps which may assist retirement savers in planning their financial futures:
Be realistic about your retirement aspirations and how much they will cost
Consider how long you want to continue working and when you can afford to retire
Assess your wider financial commitments, such as supporting family members
Have a clear plan that covers how you will fund your retirement
Choices for later life is the 11th report in The Future of Retirement series and was published in April 2015. It represents the views of more than 16,000 people in 15 countries and territories: Australia, Brazil, Canada, France, Hong Kong, India, Indonesia, Malaysia, Mexico, Singapore, Taiwan, Turkey, the United Arab Emirates (UAE), the United Kingdom and the United States. The findings are based on a nationally representative online survey sample covering people of working age (25 and over) and those in retirement. The survey was conducted online by Ipsos MORI in August and September 2014, with additional face-to-face interviews in Indonesia and the UAE. Read the full report.