What is intergenerational financial planning?

In recent years, a stark wealth gap has developed between older and younger generations – and it is only getting wider.

A combination of substantial property and stock market gains, in addition to generous final salary pension schemes, has paid off for the ‘baby boomer’ generation, which now holds over half of all UK private wealth1. By contrast, younger generations are crushed beneath the weight of student debt, high housing costs and an insecure job market – not to mention the increasing cost of saving for retirement.

Bridging the gap

Intergenerational financial planning is a strategy designed to ensure the smooth transfer of wealth down the generations in a controlled and tax-efficient manner.

It enables the various generations of a family to work together collaboratively, minimising disputes or conflict and instead ensuring that family wealth is protected and opportunities for growth maximised from one generation to the next. In this way, each generation will have access to the right assets at the right time.

The ‘great wealth transfer’

In the next three decades, up to £5.5trn is expected to be passed onto the next generation as baby boomers prepare pass on assets to their heirs2. This staggering sum inevitably means that intergenerational financial planning has never been so important – or necessary – for British families.

1Resolution Foundation, 2017, 2Kings Court Trust, 2017