Half of over 55s relying on an inheritance to make ends meet
According to research by Tower Street Finance, over half of the over 55s are relying on an inheritance to make ends meet.
Almost a quarter (22 per cent) are banking on an inheritance to pay off debts, such as credit cards and personal loans or to become mortgage free.
A further 28 per cent said they need the nest egg for retirement with 21 per cent using it to afford the cost of living in old age and a further 7 per cent investing it into their pension pot.
And a quarter (25 per cent) said they would use an inheritance to help out their children or grandchildren.
A smaller number of people think an inheritance will put them in a financial position to enjoy a holiday (18 per cent), or buy a new car (10 per cent).
But despite so many people relying on an inheritance windfall to afford later life, few understood how long the process of receiving their money, known as probate, would take.
Only 9 per cent of over 55s were realistic about the fact it can take 12-18 months for the process to complete so they can receive their money. Over half said they had no idea how long it would take and 40 per cent thought it would be sorted out in less than 12 months.
Dicky Davies from Tower Street Finance said: “With so many people banking on receiving an inheritance and shocked by how long it can take to receive the Grant of Probate, it’s perhaps no surprise that half of the over 55s also said they would like to receive their inheritance early if they could. That’s why we designed our award-winning product, Inheritance Advance.
“Inheritance Advance is the first product of its kind to be launched in the UK. Unlike a traditional personal loan or bridging loan, Inheritance Advance is paid back from the estate once the Grant of Probate is issued. There is no risk, no personal liability, no credit checks and no monthly repayments for the beneficiary.”
For those expecting to receive an inheritance over £325,000 there is potentially another shock in store in the form of a 40 per cent inheritance tax bill.
Dicky continued: “Only 18 per cent of the over 55s we asked knew that inheritance tax has to be paid before they can receive their inheritance. For many people that puts them in a catch-22 situation where they can’t afford to pay the tax bill until they’ve received their inheritance but can’t receive it until the tax is settled.
“However, we’ve also come up with a solution to help people in this position. Our IHT Loan pays the bill direct to HMRC. Again, there’s no risk or liability because once probate is complete, the loan is repaid from the estate.”
To find out how Tower Street Finance can help you access your inheritance sooner visit www.towerstreetfinance.co.uk or call 0343 504 7100.