Britain's millennials will inherit $5.5tn (£4.1tn) over the next 30 years – but if they do not plan with their parents how to spend it, they will end up frittering away almost all of it.
Without that intergenerational discussion, the shock of sudden wealth combined with financial illiteracy and a lack of planning means only 30 per cent will be left for their own grandchildren. By the time those grandchildren have kids, 90 per cent of that family fortune will be gone.
Much has been written about the so-called great wealth transfer, which in the next couple of decades will see the most affluent generation in history – the baby boomers – pass down a global figure of around $70tn to their descendants.
However, there is less conversation about what happens after that.
According to the above research by US-based wealth consultancy Williams Group, most of those lovingly bequeathed fortunes will simply be frittered away – hardly the future grandma and grandpa boomer had in mind.
But there is a simple solution to keep that money safe, according to charitable organisation Intergenerational England, and that is for families to talk about the transfer of assets – honestly, directly, and now.
“The great wealth transfer is not just about passing on assets, it’s an opportunity for meaningful conversations between family members of all ages,” says Intergenerational England’s co-founder Charlotte Miller.
“By discussing money openly, younger people can learn valuable lessons on financial responsibility, investment strategies and the emotional nuances of wealth – and parents can learn and understand their children’s short-term and longer-term financial priorities.”
Intergenerational England, whose trustees include Conservative peer Lord Syed Kamall, champions all-age collaboration and communication across all sectors to create a healthier, happier and more prosperous society.
And it believes families need those financial conversations to ensure the transfer of wealth goes smoothly and increase the chances of younger family members being able to hold onto it.
“These discussions help younger people gain financial literacy and wisdom, while older generations can share their experiences and values,” says Miller. “It’s about more than wealth. It’s about fostering understanding, reducing financial anxiety, and strengthening the social fabric across all age groups.”
Generational attitudes to money do tend to differ. Boomers (1946-1964) were born into a pragmatic, cautious society where the most prized evidence of security was a ‘job for life’. From them came Gen X (1965-1980 ), who were conditioned to focus on saving for retirement.
Millennials (1981-1996) have grown up with online banking but lack financial education and are more likely to build up credit card debt.
Gen Z (1997-2012) have known nothing but digital finance, exposure to spending analytics and online/social media advice – yet their inability to get on the housing ladder, meaning they live at home longer without a mortgage or raising a family, inevitably gives them a generally more short-term fiscal outlook.
