The meek shall inherit an average of pounds 26,000
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Your support makes all the difference.ALMOST one household in 50 will gain from inherited property each year this decade, writes Peter Torday. The inheritances - pounds 26,000 on average - are helping to disperse wealth from traditional retirement regions in the South to less wealthy areas with younger populations, a new study has concluded.
The report, in the latest Lloyds Bank Economic Bulletin, says property inheritance will give a 'significant boost' to net household wealth during the 1990s. An average of 18 households in every thousand will inherit the equivalent of pounds 26,000, expressed in 1991 pounds, compared with existing average adult net liquid wealth of pounds 6,000 and net total wealth of pounds 58,000.
It also expects wealth to be transferred from the wealthy southern retirement regions - where property ownership is above average - to the Midlands, the North and Wales, where the populations are younger.
The bank forecasts a significant shift out of housing equity and into financial assets and consumer spending. It suggests that inherited property will often be sold. At least 50 per cent of the money raised will be invested and about 25 per cent will be consumed.
This suggests that demand for financial instruments will rise. The importance of annuity policies will also grow as housing equity is converted into income during retirement.
But a much slower climb in house prices is expected to limit the inherited gains. Lloyds forecasts that prices will rise at an average 4.8 per cent a year until 2001, compared with 13 per cent in the 1970s and 1980s.
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