One in 10 of UK adults born in the 1980s will inherit more than half as much money from their parents as the average person earns in a lifetime, according to a new report by the Institute for Fiscal Studies, one of the nation’s leading economics thinktanks.
It said wealth passed down from one generation to the next was fast-becoming the most important determinant of how well-off people will become.
On average, the inheritances of adults born in the 1980s will be worth as much as 14% of their overall lifetime earnings from work, compared to 8% for people born in the 1960s.
The thinktank found the median inheritance for those born in the 1980s is estimated to be £136,000, compared to £107,000 for those born in the 1970s and £66,000 for those born in the 1960s. This represents a more than doubling in the size of inheritances, at a time when incomes have barely risen for young adults compared to previous generations.
The IFS said people born in the 1980s had accumulated no more wealth than adults born in the 1970s had done by the same age, but that their parents were 40% better-off in comparison.
The IFS said adults born in the 1980s currently earn less than adults born just 10 years earlier had done by the same age. However, it found that while one in 10 of those born in the 1960s would inherit an amount equal to at least 32% of average lifetime earnings, one in 10 of those born in the 1980s will inherit more than 52% of average lifetime earnings.
David Sturrock, a senior research economist at the IFS, said: “So what we see today as differences in wealth between different generations is on course to have important implications for social immobility within younger generations.”
Robert Palmer, executive director of the campaign group Tax Justice UK, said: “This report is further proof of the scale of wealth inequality with inheritances set to grow in coming years.”
Official figures show that the income of the richest 20% of people in Britain was more than six times the poorest 20% in the last financial year.