Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, February 19, 2019

One in Five UK Baby Boomers are Millionaires

UnionjackBaby boomers over the age of 65 are dramatically increasing in wealth in the United Kingdom with a 96% increase in the median household wealth from 2006 to 2016, according to Netwealth, a wealth manager that analyzed the Office for National Statistics’ Wealth and Assets surveys. In 2006, those over the age of 65 owned 28% of UK's household wealth and 10 years later than number had increased to 36%.

This age group appears to be getting wealthier due to time and luck. The 10 years studied coincides with the “peaks and troughs of interest rates for the UK,” according to Evangelos Assimakos, investment director at Rathbones in Edinburgh. Banks cut interest rates and provided financial stimulus, and the result was an inflation in financial assets, including property and share portfolios. In fact, now 20% of baby boomers are millionaires.

Younger households do not appear to have fared quite as well. Citizens between the ages of 35 and 44 (Generation X) saw a 5% fall, while the 25 to 34 (Millennials) experienced a 2% decrease. Though these numbers do not seem dire or extreme, they are a far cry from the extravagant increase that the older generation has seen.

With great power - or money - comes great responsibility - or planning. Experts advise that parents or grandparents wanting to assist a child decide if they want to do so with a gift or a loan. If the person decides on a gift, certain decisions should be made on when to transfer the property or cash as to avoid the inheritance tax, which follows the "seven-year rule." Though becoming increasingly expensive, trusts still remain a viable option to transfer wealth to younger generations. 

See Nikou Asgari, One in Five UK Baby Boomers are Millionaires, Financial Times, February 8, 2019.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

https://lawprofessors.typepad.com/trusts_estates_prof/2019/02/one-in-five-uk-baby-boomers-are-millionaires.html

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