The Great Wealth Transfer

The Largest Wealth Transfer in History

Over the next 30 years, an estimated £5.5 - £7 trillion in wealth will be handed down from older generations to younger ones in the UK. This “great wealth transfer” represents the biggest intergenerational passing of assets in British history. The scale is driven largely by the baby boomer generation - who collectively hold a majority share of UK wealth accumulated through rising property values, generous pensions, and economic growth. As this cohort ages, their money, property, and investments will flow to their children and grandchildren in what will likely be the most significant financial event of their lives.

Several demographic and economic trends converge to make this wealth transfer unique. Unlike previous generations, today's older adults are living longer and holding onto assets for longer. Consequently, this transfer will happen over a compressed time window and will disproportionately affect the current middle-aged population, who may already be planning for their own retirement.

Inheriting at 61

One underappreciated dimension of the current wealth transfer is the timing. On average, individuals in the UK now inherit around the age of 61. This is a dramatic shift from earlier generations, where inheritance typically came during early or mid-adulthood and was used to support first home purchases, raise families, or grow small businesses.

Today, inheritance often arrives when many recipients are nearing retirement themselves. In practice, this changes both the purpose and the planning horizon for the inherited wealth. Rather than supporting early life goals, these assets may be used to bolster retirement savings, fund later-life healthcare, or be passed further down to the next generation.

This delay also raises important questions about preparedness. Individuals receiving an inheritance later in life may already have established financial habits, risk tolerances, or estate plans that don’t fully account for a sudden influx of capital. Without proper integration, this inherited wealth may be underutilised or misallocated.

Lifetime Giving Is Gaining Ground

Because of this shift in timing - and the recognition that younger generations face considerable financial headwinds - lifetime gifting is on the rise. Many parents and grandparents are choosing to transfer some wealth while they are alive. This may come in the form of help with a first home deposit, contributions toward education fees, or support with living costs during difficult financial periods.

Housing, in particular, is a major driver. With property prices remaining historically high relative to incomes, younger adults often find themselves priced out of the market. Parental assistance is increasingly essential to bridge the affordability gap. Education and childcare costs also motivate early support.

Lifetime giving carries emotional and practical benefits. It allows older generations to see the impact of their support and enables wealth to be used when it is most needed. However, it also adds a layer of complexity, particularly around fairness among siblings, long-term affordability, and - importantly - inheritance tax exposure.

The Rising Inheritance Tax Burden

While only a minority of estates currently pay inheritance tax (IHT), the share is growing. This is due not to dramatic changes in the tax regime, but to the quiet effect of fiscal drag. As property and asset values increase and IHT thresholds remain frozen, more estates are crossing the line into taxable territory.

IHT is charged at 40% on estates above the nil-rate band, currently set at £325,000, with an additional allowance for passing the family home to direct descendants. With house prices alone pushing many estates over these thresholds - particularly in London and the South East - the number of families caught by the tax is rising steadily.

This has direct consequences for those likely to inherit. Without careful planning, a significant portion of their expected inheritance may be consumed by tax. In some cases, beneficiaries may even need to sell family assets, such as a home or business, to cover tax liabilities.

Moreover, the taxation of unused pension pots is also changing. From April 2027, many defined contribution pensions left unspent at death will become subject to inheritance tax. Previously, these could pass to beneficiaries free of tax if the pension holder died before age 75. These changes will reshape how pensions are integrated into estate planning - and affect what beneficiaries ultimately receive.

Proactive Planning and Responsible Stewardship

Against this backdrop, the need for proactive estate planning has never been clearer. For those likely to inherit, encouraging such planning - delicately, respectfully, and early - is a form of responsible stewardship. It helps ensure that family wealth is not unnecessarily diminished and that the intentions of the older generation are honoured.

Estate planning tools such as updated wills, lasting powers of attorney, and gifting strategies can dramatically improve the outcome of a wealth transfer. Yet many older adults delay or avoid taking these steps. For adult children, showing interest in ensuring these basics are in place is not a signal of entitlement - it’s a signal of care.

Lifetime gifting can be structured around tax allowances to reduce the value of the taxable estate. Life insurance can be used to cover expected IHT liabilities. Trusts may offer further control over how and when wealth is accessed. None of these tools are new - but they only work when applied intentionally, well in advance.

A Call to Quiet Action

The great wealth transfer is happening. It is reshaping families, finances, and future possibilities across the UK. For the generation likely to inherit, now is the time to think not only about what they might receive, but how it will be passed on - and why those conversations matter.

This is not about asking for money. It is about making sure the people you love have the right plans in place so that what they’ve worked for isn’t lost to tax, complexity, or silence. It is about ensuring that wealth flows through generations in a way that strengthens family security, not jeopardises it.

The quiet actions taken now - conversations started, questions asked, planning encouraged - may one day prove to be the most valuable inheritance of all.