New data commissioned by Octopus Money reveals that 60% of Gen Z and 56% of Millennials who are set to receive an inheritance or money from family are banking on this to achieve major life goals – with more than half saying it is the only way they can afford to get on the housing ladder.
Yet concerns over the soaring costs of later-life care are prompting many parents and grandparents to hold onto their money, which could leave young people waiting far longer for the help they are counting on. Two-thirds (67%) of UK adults who plan to give money to family members say they would have liked to give more, but worry about covering their own future expenses. Over 60% of them are specifically keeping funds aside for potential care costs.
For those self-funding, care home fees can cost up to £1,700 a week in the UK. Kristian Manton, chartered financial adviser at Octopus Money, highlights that on average £80,000 a year is needed to cover these costs. He explains: ‘Pensions remain the most accessible source of funds for paying care fees and, outside of property, they are typically people’s largest asset. Immediate needs annuities can also help. But increasingly, families are having to sell property to fund care, and without proper planning, these costs can quickly eat into inheritances, leaving the next generation with far less than expected.’
Britain’s “Great Wealth Transfer” feels unclear for many
Britain’s £5.5 trillion “Great Wealth Transfer” is set to benefit younger generations over the next two decades. However, the data suggests that for many families, the picture still isn’t clear, as only a third (36%) of Gen X and half (50%) of Boomers who are planning to give money or leave it in their will have talked to their family about it.
Kristian warns that this is leaving young people in the dark about what they might receive and when. He comments, “We can see the Great Wealth Transfer on the horizon, but it’s not all rosy for younger generations – we’re actually looking at a perfect storm of uncertainty if families don’t talk to each other about what they are planning to gift, and what they might leave in their will.
“A lack of communication within families and conversations about financial goals – what we call intergenerational planning – can also lead to unintended knock-on effects for beneficiaries when money is passed on, such as children needing to sell assets, or grandchildren no longer being considered first-time buyers and having to pay penalties to use their Lifetime ISA savings, for example.”
Those who are more prepared are turning to financial advice to make sure they have enough money to balance both gifting money to family members, and preparing for costs later in life.
“I want to use my money to help my children now, but make sure I’m not a financial burden later on”
Janie, 60, has received advice from Octopus Money following her own divorce to rebuild her confidence in managing her own income and learn to invest to ensure she can both give money to her children now to help them buy a property, and prepare to cover the costs of care later in life, should she need to.
“I want to support my children now and help them get on the property ladder, but I also want to make sure I am not a financial burden in my old age if I end up needing nursing care.
“So, I’m learning to take a more proactive approach to planning for the future and managing my money. I used to have a very cautious approach to risk but since my divorce, I’ve learned that I’m not the only one. Many women share this attitude – more women choose to save their money in cash ISAs than to invest in more lucrative bonds, for example. I have been learning to invest and have set up a new business as an accredited divorce coach. I’m now much more confident that I’ll be able to both support my children now, and have financial security as I get older.”
How should you prepare for the Great Wealth Transfer?
- Start having open conversations about money. “I’d urge parents and grandparents to talk to their children about money and their inheritance plans. It’s the best way to prepare your children to manage wealth responsibly and ensure that you’re setting expectations about what they might receive,” Kristian explains.
- Once you’ve started the conversation, make a plan together. Consider encouraging your children and grandchildren to take part in your financial planning sessions. “I have found it extremely valuable to invite beneficiaries of gifts or future wills into financial planning sessions. It helps families plan the transfer of their wealth together, including when and what younger generations could expect, and whether it will be a gift or as an inheritance.”
- However, don’t rely on an inheritance or gift. Plan as if it won’t come to fruition. “Today’s cost of living is high, and the housing market feels increasingly difficult to enter for the first time. It’s understandable that younger generations are feeling reliant on gifts and inheritance to see them through. However, we always encourage people to plan as if they are not going to receive anything. This will make sure their financial plan is as secure as possible and not dependent on potential unknown circumstances in the future.”
ENDS
Notes to editors
Nationally representative survey of 2,000 UK adults commissioned by Octopus Money and conducted by Opinium between 1st August and 5th August 2025.
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