Inheritances dropped to sort retirement shortfall

By Lenore Rice

An increasing number of people are having to drop their plans to leave an inheritance to their children as they begin to count the cost of retirement, says a new report by HSBC.

Entitled 'Life after Work', the report says that 20 per cent of people will never be able to afford to retire, and that on average there is an 8 year shortfall of funding for life after retirement. The report says that people who retire tend to live another 18 years, but that the average savings pot will only fund 10 years of retirement.

It is thought that most people under-estimate how much they will need in retirement, with over half of those polled (52 per cent) saying that their living costs hadn't reduced after retirement, and 17 per cent said that they had actually increased.

However, while most people will not have the means to leave an inheritance, a very high 69 per cent of retirees say they plan to leave something to their children, with 31 per cent saying they definitely will have an inheritance to pass on. In most cases the family home is the main asset used to provide an inheritance, but even that is under threat as many couples turn to lifetime remortgages in order to fund their retirement. These mortgages involve the property being sold upon the death of the borrower, with the sale proceeds being used to pay off the loan amount.

If you require legal advice to make a Will that sets out your inheritance provisions contact one of the probate solicitors at Wilson Nesbitt in Belfast or Bangor by calling 0800 840 9293.

Or click here to request a free Wills information pack online by submitting your contact details.