The great wealth transfer is also a workplace wellbeing issue

A transfer measured in decades, not headlines

Research produced by the Centre for Economics and Business Research for Kings Court Trust estimated that £5.5 trillion could pass between generations in the UK over 30 years. It also forecast annual transfers rising from £69 billion in 2017 to £115 billion by 2027. These are long-term estimates, not a prediction that £1 trillion will change hands in a single year.

The numbers are striking, but scale is not the same as preparedness. A transfer can involve a family home, pensions, investments, a business, personal possessions and responsibilities that are difficult to value. It can also arrive during bereavement, when people have the least capacity for hurried decisions.

The planning gap is usually a conversation gap

Many families avoid talking about wealth because they want to protect privacy, prevent entitlement or avoid upsetting people. Those intentions are understandable. Silence, however, can leave the next generation unsure about practical arrangements, family expectations and who is meant to coordinate with professional advisers.

A useful family conversation does not require every balance to be disclosed. It can begin with principles: what the money is for, which responsibilities matter, how decisions will be made and where important records are kept. The aim is not to promise an inheritance. It is to reduce avoidable uncertainty.

Three generations may need one joined-up plan

Older family members may be balancing retirement security, later-life care and a wish to help sooner. Their adult children may be supporting both parents and children at the same time. Younger adults may face housing costs, education decisions and a changing labour market. Each generation sees the same family resources from a different position.

This is why estate planning should not sit in isolation from retirement planning, protection, investment risk, tax and family governance. Decisions in one area can create consequences elsewhere. A gift that looks affordable today may affect future resilience. An outdated beneficiary nomination or will may not reflect the family’s current intentions. Professional legal and tax advice may be needed alongside regulated financial advice.

A practical starting point

Begin with an inventory rather than a solution. Record the main assets, liabilities, policies, pensions, legal documents and adviser contacts. Confirm that executors, attorneys and relevant family members know where the information can be found. Then identify the decisions that need specialist advice and the decisions that are simply waiting for a family discussion.

Good planning is not about predicting every future event. It is about creating enough clarity that the family can respond well when circumstances change. That can mean reviewing documents, testing retirement cash flow, agreeing how support will be discussed and setting a regular date to revisit the plan.

The next question

The great wealth transfer is often described as a national event. For each family, it is personal. The useful question is not “How much will we inherit?” It is “What conversations and decisions would help every generation feel better prepared?”

Sources

• Kings Court Trust and Cebr, Passing on the pounds

• HMRC, Inheritance Tax on pensions technical note

Explore how Aetas Workplace can include family money conversations in your financial wellbeing programme.

Disclaimer. This article is for general information only and does not constitute personal financial, legal or tax advice. Tax treatment depends on individual circumstances and may change. The value of investments can fall as well as rise, and you may get back less than you invest. Where regulated financial advice is required, this is provided separately by Aetas Wealth, a trading style of Insight Financial Associates Limited, authorised and regulated by the Financial Conduct Authority (registration number 458421).