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NE chooses retirement fund over flash cars and holidays

More than half of North East residents expecting to inherit money will use it to fund their retirement, according to a recent survey. The third annual National Inheritance Survey by Wise Speke has revealed that 57% of North Easterners with inheritance coming will be saving the money until they finish working.

The results reflect a UK-wide increase in the number of people planning to live on their expected inheritance having given up work – up from 27% in 2006 to 43% (8.5 million adults) this year.

The survey by the investment management company also shows that 38% of regional respondents plan to invest their new wealth in property, using the windfall as a down payment for their children’s first home. This is again reflective of trends across the country. However more worryingly, a significant number of North East respondents, 37%, are relying on the cash to pay off debts, although this figure is below the national average.

Jane MacAlister, a divisional director for Wise Speke in Newcastle, said, “The number of people aged 65 and over is expected to rise by nearly 60% in the next 25 years and those aged over 85 years is predicted to double over the next couple of decades. In turn, parents will have to spend more to fund their longer retirement years and will end up leaving less for their children.

“Rising house prices are also having an impact because more families now own a property worth over £285,000 and any amount over this figure is subject to 40% Inheritance Tax – potentially a hefty sum of money to lose. “Although a reflection of rising personal debt and people’s low pension expectations, banking on an inheritance to pay off a mortgage or other debts and even fund retirement is a risk.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .