If UK adults inherited a significant lump sum today, almost half would save at least some of it and almost a quarter would invest but there are still missed opportunities.
A survey by Hargreaves Lansdown found 22 per cent of people would pass some of their inherited wealth to other family members, 20 per cent would pay off their debts and 18 per cent would buy a house.
Among those aged 18-34, the top three priorities were saving, investing and buying a house.
Sarah Coles, head of personal finance at Hargreaves Lansdown said while people were hitting their goals when inheriting wealth, there was a real risk of missing key opportunities.
She said: “There’s a world of difference between what we say we’d do and what we’d really do. When we’re asked these questions, we tend to focus on the things we’re worried about right now.
“For lots of people this clearly includes not having enough savings or investments, not owning a home, or being in debt, so we say we’ll deal with these things first. It’s why when lottery winners are asked what they’ll buy with their £12mn, their first answer is a washing machine or a new pair of slippers.
“However, there’s the hope that after spending on some of the more fun things in life, or the big one-off expenses we need, we will also prioritise the key financial goals in life. So if we do inherit, there are rules for making the most of it.”
The first “rule” Coles discusses is for people with newly found wealth to take their time.
She also pointed out it was useful for people to work out their key priorities because for people who don’t have emergency savings the top priority may be to save some in a savings account or Isa.
However for those who already have enough savings in place, Coles suggested it may be worth considering other aspects of their finances.
She said: “The next most popular answer is to invest. However, there’s a gender gap here, because men are more likely to invest than women (29 per cent compared to 17 per cent).
“And while this will owe something to the fact that men may already have met their savings targets because they’re on higher average incomes, there’s definitely scope for women to consider using this opportunity to open a stocks and shares Isa.”
Coles also encouraged people to look into potentially boosting their pension or Sipp if they have received an inheritance.
“The HL savings & resilience barometer shows that only 39 per cent of people are on track for a moderate retirement income, and an inheritance is an opportunity to address this. Interestingly, men are more likely to say they would put some into their pension (14 per cent compared to 11 per cent) which bearing in mind that women tend to have far smaller pensions on average means there’s a real missed opportunity for women to make up some ground,” she added.
