Banking on a bequest: More than a third of Aussies expect an inheritance
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New research from Finder, Australia’s most visited comparison site, reveals that over one-third of Australians are anticipating an inheritance in the coming decades, with many preferring to receive it while their relatives are still alive.
The survey of 1,062 respondents found that 36% of Australians, equivalent to 7.5 million people, expect to receive an inheritance. Of these, 10% anticipate receiving an inheritance within the next 10 years, while 13% expect to wait up to 20 years.
Sarah Megginson, personal finance expert at Finder, said, “After decades of building up wealth, baby boomers are passing down trillions in savings and investments to their children and grandchildren.”
Among those expecting an inheritance:
- 28% anticipate receiving over $100,000
- 20% expect between $50,000 and $100,000
- 15% anticipate up to $50,000
- 21% believe they will inherit one property
- 4% think they will inherit two properties
Notably, 40% of respondents, equivalent to 8.3 million people, stated they would prefer to receive their inheritance as a gift while their family member is still alive.
Megginson explained the benefits of early inheritance: “An early inheritance lets the parent see their children or grandchildren enjoying the gift, and the financial windfall at a younger age gives them more opportunity to use it towards something that drastically improves their life, like a deposit on a home or investing it in education.”
However, she cautioned that such decisions require careful consideration of future financial needs and tax implications.
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A Productivity Commission report estimates that Australians aged 60 and over will transfer $3.5 trillion in wealth over the next two decades, averaging about $175 billion per year.
Megginson emphasized the importance of having a will to outline asset distribution and control of the process. She advised, “It’s always best to make those decisions upfront and with transparency, so relatives aren’t left with false expectations.”
For those expecting to be beneficiaries, Megginson stressed the importance of planning how to make the most of the inheritance for future generations.
This research highlights the significant intergenerational wealth transfer expected in Australia and the changing preferences around inheritance distribution, with potential implications for financial planning and family dynamics.