Intergenerational Transfer of Wealth 2020

Respondents to the Household Finance and Consumption Survey (HFCS) were asked if they expect to receive an inheritance or gift at some stage in the future. One fifth (21%) of households expect to receive a wealth transfer at some time in the future. This includes households that had received and had not received such a transfer already.

As the age of the reference person increases the expectation of receiving an intergenerational transfer decreases, as older households were more likely to have already received an intergenerational transfer. Over a third (35%) of households whose reference person was aged under 35 expect to receive an inheritance or gift in the future. This decreases to 32% for households whose reference person was aged 35 to 44 and falls to 17% for those age 55 to 64. Of those whose reference person was aged 65 and above, 4% expect to receive an intergenerational transfer in the future. See Figure 4.1 and Table 4.1.

Households in the Eastern and Midland region were more likely to expect to receive an inheritance or gift, with one in four (26%) households having reported this expectation, compared to 18% of those in the Southern region and 13% of those in the Northern and Western region.

The higher the educational attainment of a household reference person the more likely the household was to expect to receive an intergenerational transfer in the future. Over one third (34%) of households with a third level degree or above expect to receive an inheritance or gift in the future, while 4% of households with primary education expect to receive a transfer in the future.

Of the various household compositions, households of 2 adults with 1-3 children aged under 18 were most likely to expect to receive an inheritance or gift in the future. Younger households also had high levels of expectation. Older households and single parent households were the least likely to expect to receive a transfer in the future. See Table 4.1.

It may be suggested that households that expect to receive an inheritance or gift in the future may be more likely to take on debt in advance of these transfers. Figure 4.2 illustrates that households with any type of debt (25%) were almost twice as likely to expect to receive an intergenerational transfer in the future as households without debt (13%). 

Similarly, of those households with mortgage debt on their household main residence, 32% expect to receive an inheritance or gift in the future compared to 17% of households without mortgage debt who expect to receive a wealth transfer in the future. See Figure 4.2 and Table 4.1.

Except for households whose reference person was under 35, across all age groups a greater proportion of households with debt expect to receive an intergenerational transfer at some point in the future when compared to households without debt.  Of households whose reference person was under 35 years and had debt, one in three (33%) expect to receive an inheritance or gift in the future, while 39% of those without debt expect to receive a transfer. One in three (33%) of those whose reference person was aged 35 to 44 with debt expect to receive a transfer in the future compared to one in four (24%) of those without debt.

Similarly, households whose reference person was aged under 35 and with a mortgage on their home were less likely to expect to receive an inheritance or gift in the future (31%) compared to those without a mortgage (36%). In all other age groups those with a HMR mortgage were more likely to expect to receive a transfer. The largest difference related to households whose reference person was aged 45 to 54, where one in three (33%) with a HMR mortgage expect to receive a transfer in the future compared to 21% of those without HMR mortgage debt. See Figure 4.3 and Table 4.2.

HFCS respondents were asked to provide information on whom they received the inheritances or gifts from. The transfer with the highest value was chosen as the primary source for this analysis. Parents was the primary source of most intergenerational transfers with 70% of all inheritances and gifts coming from parents. Inheritances and gifts from grandparents accounted for 8% of transfers, while other relatives accounted for 20% of transfers.

Households were more likely to receive inheritances (21%) from other relatives than gifts (14%), while transfers from grandparents were more likely to be gifts (12%) rather than inheritances (7%). See Figure 4.4 and Table 4.3.

The median value of inheritances was higher than the median value of gifts across all primary sources of transfers. The median value of inheritances from parents was €100,600, while the median value of gifts from parents was €20,300. The median value of inheritances from grandparents was €35,500 while the median value of gifts was €9,400. See Figure 4.5 and Table 4.3.