Why millennials’ wealth relies on a good inheritance: People born in the 1980s can expect twice as much of their lifetime income from inheritance than those born in the 1960s, report reveals

• Those born in the 80s are expected to get 16% of lifetime income via inheritance
• That figure is up from 9 per cent for someone born in the 1960s, report finds
• The gap between inheritances from rich or poor parents has also grown larger 

It has long been claimed that millennials have had it worse than their parents when it comes to earnings.

And now it seems this may be true as research finds wealth is being determined more by inheritance from parents rather than our own income.

Someone born in the 1980s can expect to get twice as much of their lifetime income from inheritance than someone born in the 1960s, according to a report by the Institute for Fiscal Studies.

People born in the 1960s can expect inheritances to boost lifetime income by 2 per cent if their parents are from the poorest fifth of households, compared to a 17 per cent boost those with parents from the wealthiest fifth can get [File photo]

While the older generation has amassed more wealth than previous ones, young people today are not earning more than their immediate predecessors. 

David Sturrock, senior research economist at the IFS, said this difference was ‘driving an inter-generational divide’. 

He added: ‘Inheritances are set to become more important in future, widening the gap between those with rich or poor parents. The growing importance of inherited wealth will be a profound societal shift and one with worrying consequences for social mobility.’ 

Those born in the 1980s with parents among the poorest fifth can expect lifetime wealth to rise by 5 per cent, while those with parents from the richest fifth can get a 29 per cent rise [File photo]

Someone born in the 1980s is expected to get 16 per cent of their lifetime income from inheritance, up from 9 per cent for someone born in the 1960s.

Yet the gap between inheritances from rich or poor parents has grown larger. People born in the 1960s can expect inheritances to boost lifetime income by 2 per cent if their parents are from the poorest fifth of households, compared to a 17 per cent boost those with parents from the wealthiest fifth can get. 

But those born in the 1980s with parents among the poorest fifth can expect lifetime wealth to rise by 5 per cent, while those with parents from the richest fifth can get a 29 per cent rise.

The IFS also expects people born in the 1980s to have roughly £16,000 less saved at age 45 as more rely on inheritances, not income, to fund retirement.

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