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.”