Sounds like some sort of bad novel doesn’t it? But it’s about to happen, right before our very eyes. In fact, in many ways, it’s already underway.

As much as we hate to give people ‘tags’ the generation ‘tagged’ as the ‘Baby Boomers’ (generally thought of as those born between 1946 and 1964) are statistically some of the most financially secure in history. They had it hammered into them to buy their own homes, pay into pensions, and ‘save for a rainy day’.

Because of this, over the next two decades, the UK is expected to experience the biggest shift of wealth between generations in its history. Research suggests that as much as £5.5 trillion will be passed on by older generations to their children and grandchildren.

The Baby Boomers children are often later ‘Generation X’ers’ (1965 to 1980) or, in the main, ‘Millennials’ (a tag often despised by those within the group, but generally accepted as those born between 1981 and 1996).

There are many reasons why this passage of wealth is now expected to happen, including a considerable rise in property values over the last few decades coupled with high rates of home ownership amongst older generations as well as substantial pension pots and an increased growth in long-term investments being passed down, either as a result of good tax planning, or on the death of Baby Boomer parents.

Economists are predicting this wealth passage may be so significant as to affect house prices and the stock exchange. As an oft frustrated group, struggling to get on the housing ladder through inflated house prices, or without enough disposable money to start a pension or savings pot, Millenials may suddenly find their fortunes reversed. After those years of frustration they are predicted to use this inherited or gifted wealth to finally get onto the property ladder, (or move to bigger houses), play ‘catch up’ with their pensions, or frugally put money aside to give some security for them for the future in increasingly uncertain jobs markets.

Whilst undoubtedly this wealth shift will create opportunities for younger generations, this will not come without challenges. Inheritance Tax is becoming a greater concern for many families with more Estates now approaching or exceeding the Inheritance Tax threshold. The recent changes to the tax treatment of farms and business assets further adds to this tricky situation, and the announced changes to the tax treatment of pension pots is just going to make the situation worse.

Estate planning is therefore crucial for all generations to ensure that assets are managed and passed on in a tax-efficient manner. There are steps you can take to mitigate your Inheritance Tax liability on the passage of assets, both during your lifetime and in your Will to take effect on your death.

So, what can we do to assist with it? After all, if Generation:Millennial are potentially about to go from being indebted to the Bank of Mum and Dad to owning the deposit accounts in that bank, it’s going to take some good guidance along the way. But the good news is, we are here to help. All of our Private Client Team are very experienced in advising those with all levels of wealth, and all of advice is bespoke to you.

To talk through your Estate planning options – be it under your Will, or during your lifetime, please get in touch.