UK Baby boomers' to get asset-rich
Baby boomers are so asset-rich that they will cause an unprecedented boom in the value of housing wealth that is inherited in the next 15 years in UK.india Updated: Feb 25, 2006 15:29 IST
Baby boomers are so asset-rich that they will cause an unprecedented boom in the value of housing wealth that is inherited in the next 15 years, the Halifax said on Saturday.
Four fifths of people born in the years immediately following World War Two own their own home, more than any other age group.
Halifax said because they were the first mass generation of homeowners, their deaths would lead to record levels of wealth transfer in Britain.
"The amount of housing wealth inherited is expected to double in 15 years, reflecting demographic changes and the passing away of the first mass generation of homeowners," said Ray Milne, managing director of Halifax Financial Services, in a statement.
Britons currently inherit around 14 billion pounds a year in housing assets alone. By 2020, the bank said, that would increase to 32 billion.
It said rising house prices would play only a modest part in that increase. Most would come from the growing number of overall estates due to an ageing population and the rise in the number of owner occupiers.
However, it said the distribution of that wealth would be extremely uneven with assets in the south of England accounting for more than half of the total.
"The south of England's share of inherited housing wealth is higher than its share of economic output," the report said.
Milne said this wealth would undoubtedly help the next generation to fund their retirements without the need to downsize from their own homes to do so.
He said the figures did not take into account any likely impact of inheritance tax, people releasing some of the equity in their homes to boost their own retirement incomes, or the number of elderly people who would need to use their equity to fund residential care.