AMP Baby Boomers Bequest Research
17 July 2003 at 1:07 pm
“You can’t rely on the old folks’ money” is the catchy finding of new research released by finance giant AMP and the National Centre for Social and Economic Modelling (NATSEM). But it also contains encouraging news for charities.
As many as four in five Australian baby boomers may not receive a significant inheritance despite nearly $70 billion of inter-generational wealth changing hands in the next 20 years.
New AMP research has found accumulated wealth per Australian had more than tripled since the 1960s and would continue to grow to an estimated $70 billion available for bequest in 2030.
However the research, conducted by the National Centre for Social and Economic Modelling (NATSEM), revealed the changing lifestyles and attitudes of older people coupled with a diminishing bequest ethic meant many baby boomers were generally unlikely to receive the financial windfall they think is coming.
AMP’s Australian Financial Services Managing Director, Craig Dunn, says these factors mean relatively few baby boomers would ever get to see much wealth as a bequest from a will.
Dunn says around 40 per cent of Australians are likely to die without a will or any kind of plan about how they want to leave their affairs.
He says many baby boomers have not adequately prepared for retirement and it’s likely that many are counting on an inheritance to help see them through.
The report, called ‘ Wealth and Inheritance: you can’t rely on your old folks’ money’, found the massive growth in wealth had resulted from people living longer, having fewer children to divide the wealth between, and from the housing and stock market booms of the 1980s and 1990s.
The Director of NATSEM, Professor Ann Harding, says the majority of wealth among older Australians was held by very few and, as a result, four in five baby boomers would not inherit significant amounts of money with many likely to inherit very little or nothing at all.
Prof. Harding says elderly people no longer feel obliged to leave their children a large inheritance with many preferring to leave money to their grandchildren or even a charity.
But just how much money will go to Australian charities is not easy to estimate due to the lack of reliable figures.
Professor Harding’s research is based on US estimates that up to 15% of money left in wills will go to charity.
She says there has also been the emergence of a new desire for retirees to ‘spend the children’s inheritance’ in their old age which, in the bigger picture, could potentially reduce the total amount of inter-generational wealth in this country by $11 billion alone.
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