LONDON, England / The Telegraph / Finance / Economics / September 18, 2010
Parents won't have wealth to pass on, report
Future generations should not expect to inherit wealth from their parents following the ravages of the worst financial crisis since the 1930s, a new report has warned.
By Angela Monaghan
A further 42pc said they had no intention of doing so, while the remaining 48pc said they were unsure.
The survey claimed the financial crisis has produced a generation of under-saving, risk-averse Europeans, which will challenge the future of "inter-generational wealth transfer".
The responses of adults from the UK, France, Germany, Holland, Spain and Italy, showed the financial crisis has "fundamentally challenged the norms of financial wellbeing", according to Ric Van Weelden, head of Janus Capital's European business.
"Specifically, the report highlights how few Europeans are likely to have made adequate provision for their retirement, let alone passing on wealth to the next generation. The financial services industry will have a very different landscape to serve going forward," he said.
Many who were relying upon returns from their long-term investments for later life and to pass down as inheritance have seen values wiped out, and extended life expectancy is placing additional pressure on finances.
Of the six nations that took part in the survey, French respondents were most likely to pass on wealth, while their Spanish and German counterparts were the least likely.
In the UK, 16pc said they intended to pass on significant wealth to their children, 44pc said they had no intention and the remainder said they were unsure.
David Bowers, of Absolute Strategy Research, which carried out the survey for Janus Capital, said: "Inter-generational wealth transfer is something we have taken for granted.
"This is one generation when it may not happen as smoothly."
The report said that at present in the UK, the average estate is worth £90,000 and divided five ways, but Janus Capital said that is likely to change, with those aged 45 to 54 unable or unwilling to save sufficiently.
"The financial crisis has exacerbated a tendency to under-save and to be risk averse.
"Europe's working population has yet to wake up to the fact that it will not be able to retire as early as it would like, and indeed may have to work a lot longer," Mr Bowers said.
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