In a recent study, Lincoln Financial research found that one in every six adults is relying on an inheritance to help finance their future. Lincoln Financial interviewed 2376 people in February last year and found that the average windfall amount expected is £40,430.00, and of those waiting for their inheritances, nearly a third said that they would use it to pay off existing debts.
However, Lincoln Financial are warning people to be aware of the inheritance tax thresholds, as more people are getting caught in this trap. Inheritance Tax thresholds were increased in the recent Budget to £300,000 in 2008 and rising to £350,000 by 2010.
Our view
Do not rely on an inheritance to relieve yourself of your financial burdens as you may have a long time to wait. In addition, your parents may spend their inheritance before they die, this is known as going SKI-ing – Spending the Kids Inheritance. Also, it may be that your parents need care in old age, your inheritance may disappear as it funds huge care costs.