Tidal wave of wealth transfer ‘to boost economy by £677bn a year’

By John Kenchington

Added 19th June 2017

Upcoming wealth transfer of £2.8trn from the older to younger generation will boost the UK economy by £677bn a year, according to research.

Tidal wave of wealth transfer ‘to boost economy by £677bn a year’

The research said every £1 of wealth handed down by the older generation generated £1.65 for the economy, and trillions of pounds of assets prepare for transfer in the next 30 years the effects on the economy could be profound.

The annual economic gain is equivalent to 1.2% of GDP a year according to the research, which was produced by wealth manager St James’s Place and Capital Economics.

The report estimated that the UK’s over-55s today control £6.6trn of wealth. They also intend to make a third of their non-property wealth available for transfer in the next 30 years, meaning a £920bn giveaway for family members.

St James’s Place said the wealth transfer of the next three decades would be enough to buy 3.4m homes for first time buyers, provide 21.2m deposits or pay 24m students’ tuition fees.

Iain Rayner, joint chief operating officer at St. James’s Place, said:

“On average, 55 to 85 year olds transfer £40,000 to their children, grandchildren and family members, mainly for housing, university education or other major purchases.

“These are serious sums of money and, collectively, represent a vast wave of wealth that our research shows is about to be transferred.  This will have a significant impact on the finances of the recipients and the wider economy as this wealth floods into the market.

 “Families need to think about how and when they intend to make transfers to maximise the impact and achieve the most beneficial tax treatment – and lucky recipients really need to think about how and when to best deploy these gifts to change their lives.”

 

Kames Income Hub

home_research_centre

Vincent McEntegart, manager of the Kames Diversified Monthly Income Fund, explains how he aims to deliver a stable and sustainable income of 5% p.a.*, paid monthly, by investing in a range of asset classes

Square Mile Research

Premier Multi Asset Global Growth - Alex Farlow
Premier Multi Asset Global...

Talking Factsheets is a video service for users...

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address

Profiles

Viewpoint

Investment Strategy

Feature

Tweets

Events

PA Edinburgh 2017
PA Edinburgh 2017

Thursday 7 September
Balmoral Hotel, Edinburgh

PA Alternatives 2017
PA Alternatives 2017

Tuesday 12 September
Sofitel St James, London  

PA Dublin October 2017
PA Dublin October 2017

Tuesday 10 October
Westbury Hotel, Dublin

PA US 2017
PA US 2017

Tuesday 17 October
Furniture Makers' Hall

OTHER STORIES FROM LAST WORD...