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Overcoming the inheritance taboo

  • Millions of Brits avoiding the topic
  • Most wait until age 74 to discuss their will

Inheritance planning can be complicated, awkward and in some cases taboo.

Research from Octopus Investments reveals that many people are vastly unprepared for legacy planning and are still not having the conversations they need to.  

HMRC figures show that inheritance tax bills rose by 8% last year with receipts of over £5.2 billion1 However, over two-fifths (45%) of British retirees haven’t discussed with their next of kin what they might inherit.

Procrastination holding people back

The average person waits until the age of 74 to discuss their will. The major reason holding people back is procrastination – 45% admit they simply haven’t got around to it while one in five (19%) confess they don’t like talking about death.

And the next generation also admit they are being kept in the dark. Two-fifths (41%) of potential beneficiaries haven’t yet had a conversation with their parents about their will. Nearly half (48%) don’t know the value of what they will inherit. Some just don’t want to broach the topic. Out of those who haven’t yet spoken to their parents – the overwhelming majority (85%) haven’t even tried to bring up the issue.  

Beneficiaries are unprepared

The lack of preparation is rife. Many have no idea what process to follow if their parents did pass away. Four in ten don’t know who the executors of their parents will are (36%). One in five (22%) have no idea if their parents have a financial adviser.  

Some couldn’t even access their inherited assets if they tried. Two fifths (42%) of retirees admit they haven’t documented passwords for their children or beneficiaries. Among couples, a quarter (24%) don’t know their partner’s passwords or where to locate them.

Many avoid the topic

Many retirees are purposely choosing not to discuss the subject. One fifth (19%) have decided not to talk about their will and a quarter (24%) are planning not to speak to their children about what exactly they will inherit.

The research also shows that one in ten have heard of cases of poor inheritance planning with stories of families being torn apart, homemade wills or no will at all or even those who refused financial advice and had to fork out thousands in additional inheritance tax as a result.

Ben Charrington, Head of Estates and Probate at Octopus Investments said:

“People have often worked hard all their lives to save for the next generation. But what’s vital is to put plans in place and talk about them to ensure that their wishes are acted upon. While increasing numbers of people are liable for inheritance tax due to property price rises, this isn’t just an issue for the rich. It’s about the open discussions needed no matter the level of wealth. Sometimes it can be the smallest of estates that are the most complex and dividing up sentimental possessions that can be tricky. We would recommend that people seek financial advice, keep records of their assets and be transparent with their next of kin as soon as they can.” 

Corinne Sweet, relationship psychologist said:

“People often shy away from talking about both death and money in their families as these subjects bring up uncomfortable feelings of fear and embarrassment.  In the West, we can feel it’s taboo to face our mortality or be open about money, so we procrastinate and dissemble. The problem is we can leave a mess behind for our loved ones, who have to sort out inheritance pickles whilst grieving. Yet, having straight discussions – and ironing out any misunderstandings – can be such a relief to all parties.  The sooner sorted, the better.”

– Ends–

Notes to editor

Research conducted by Opinium Research 28 November to 5 December 2018 among 1000 retirees over 65+ and 1000 adults 30+ with at least one adult in retirement and 200 financial advisers.

For journalists in their professional capacity only. The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest. Personal opinions may change and should not be seen as advice or a recommendation. We do not offer investment or tax advice. We recommend investors seek professional advice before deciding to invest. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 03942880. Issued: January 2019.