Ownership amongst the young

Crashy_Time

economic wrote: »

interesting how little is in stocks.

Yes, and how much is debt or relies on debt to liquidate :rotfl:

economic

Crashy_Time wrote: »

Yes, and how much is debt or relies on debt to liquidate :rotfl:

theres not much debt.

Herzlos

GreatApe wrote: »

Also even the pensioner who never had children, their wealth it not destroyed when they die someone will get it often a member of their extended family like brothers sisters or the children of brothers and sisters

But not all - some of them will have gone back to the state / to charities etc. I'm not debating the morality, just that you're figure of 75% of pensioners owning a home doesn't correlate with grand/parents having anything to leave.

pensioners on the whole are living with a lot less money than during their career; they may have huge assets in property (with appropriate tax levels), but they may be cash poor, and have to resort to downsizing or equity release in order to pay for their care.

So from your 75% of pensioners, you need to remove those that (a) don't have anything to pass down and (b) don't have anyone to pass it down to. I haven't been able to find out numbers for either of those, so I don't know how badly it skews your figures.

GreatApe

I think many were confused the last time we had this discussion so I will add this paragraph from the report

A grant of representation may not be needed for low-value estates - generally worth less than £5,000 (though this figure can vary) – or estates which were held in joint names and which pass to the surviving spouse/civil partner. Such estates represent just over half of total deaths in a given year.

That means each year about quarter of a million estates are left to be distributed to the younger generations (estates left to your wife/husband are not included in these figures) of which the average estate is about £300,000. And once again these are 2013 number, 2017 numbers will be bigger as house prices and the stock market have recovered

Over a 30 year period that is 7.5 million estates, left primarily (i assume) to 2 children or grand children so impacting 15 million adults and their families.

If you model the country as the young the middle and the old and put in a figure of 20 million for each group. The old do the dieing and the middle the inheriting. So 15 million of the 20 million middle aged inherit. That is 75% using that simple model. Probably even higher if you look just just uk born families and exclude migrants.

No matter which way you cut it, the majority receive significant sums.

I would go back to my previous post,

75% will inherit 1.33 homes + other assets
21% will inherit 0.67 homes + other assets
6% will inherit 0 homes + probably nothing

And we know '+ other assets' is also significant in size almost equal to a house thus

75% will inherit 2.66 homes worth of wealth
21% will inherit 1.33 homes worth of wealth
6% will inherit 0 homes worth of wealth

That is for uk born kids whose uk born parents had 1.75 children and whose uk born grand parents had 1.75 children.

GreatApe

economic wrote: »

interesting how little is in stocks.

there is a lot in stocks and shares but it mostly dies with them (eg final salary pensions and annuities)

I was reading an article today which says that some companies are offering crazy multiples to transfer out of final salary pensions. Sometimes 35 x annual pension if it was me I would take that up.

Had I stayed in my first job, which had a final salary pension by age 61 I would have collected enough years to have a pension of 4/6th of my final salary. If that was the median male wage of £35k that would be an annual pension of £23.3k

To trade it in I would be offered something in the region of £700,000 - £800,000 which seems crazy! Almost makes me wish I hadn't given up the job!

Anyway my point is if I took the £700-£800k transfer and died that would likely show £700-£800k in securities in my estate.


There really needs to be an MSE post about pension transfers they look such fantastic value to me. Especially if someone has poor heath and they know about it but the pension providers dont.

EDIT: MY bad, pensions are not included in ones estate that probably explains why securities are not a bigger part. It also shows that estates actually leave more than that report indicates so my often quoted £100 billion left annually is probably a low ball estimate!

GreatApe

Herzlos wrote: »

But not all - some of them will have gone back to the state / to charities etc. I'm not debating the morality, just that you're figure of 75% of pensioners owning a home doesn't correlate with grand/parents having anything to leave.

pensioners on the whole are living with a lot less money than during their career; they may have huge assets in property (with appropriate tax levels), but they may be cash poor, and have to resort to downsizing or equity release in order to pay for their care.

So from your 75% of pensioners, you need to remove those that (a) don't have anything to pass down and (b) don't have anyone to pass it down to. I haven't been able to find out numbers for either of those, so I don't know how badly it skews your figures.

Not many people need care and of those that do go into care only about 10% end up spending more than £100k on care (people only go into care close to the very end so while its very expensive they are not in care for long)

So very few of the 75% of pensioners who are homeowners will end up spending it all.

Those who have no children are no real concern to this debate their wealth does not vanish it goes mostly to their closest relatives. Yes some old folk are spiteful and will leave it to the cats house rather than their children but again that is not a large number

ukcarper

GreatApe wrote: »

you mean the following paragraph?

The 267,549 estates issued a grant of representation in 2013-14 account for
approximately 47% of all deaths in that year. Of these estates, 19,277 were liable to
inheritance tax. Approximately 3.4% of all deaths in 2013-14 led to an IHT charge.
This figure is higher than the 3.1% of deaths which led to an IHT charge in 2012-13
or the 2.9% of deaths that led to an IHT charge in 2011-12, although lower than the
percentage of deaths resulting in an IHT charge in the period before 2009-10


I am assuming you are hung up on the 'Approximately 3.4% of al deaths in 2013-2014 lead to an IHT charge'?

You do realise that does not mean 3.4% left an inheritence it means 3.4% left an inheritence big enough to fall into a IHT tax bill. Soon the IHT band will be £1 million for couples so it means 3.4% will leave more than £1 million

Your link, which I have read previously says what I am saying that significant numbers leave significant sums. Its even better if you are uk born from uk born grandparents.

47% of deaths not included because grant of representation. Only 3.6% of deaths has estates in excess of £325k or £650k incase of couple. So somewhere between 53% and 96.6% had a estate of between £10k and £650k you are trying to imply that the majority of those were near the higher end.

GreatApe

ukcarper wrote: »

47% of deaths not included because grant of representation. Only 3.6% of deaths has estates in excess of £325k or £650k incase of couple. So somewhere between 53% and 96.6% had a estate of between £10k and £650k you are trying to imply that the majority of those were near the higher end.

I have already on numerous discussions actually posted the breakdown for you which you ignore or forget. Here it is again




Note this does not include pensions which are outside of Inheritences
Note this does not include gifts made to avoid IHT or get ones affairs in order before old age
Note this is 2013-14 and 2017 figures will be better as house prices and the stock market have recovered and savings rates have been positive

GreatApe

ukcarper wrote: »

47% of deaths not included because grant of representation

Why would you expect more than 50% of deaths to leave an estate that need needs grant of representation?

First of all children and the young die too especially young children

More importantly many deaths do not need a grant of representation as the person who dies leaves it all to their spouse. I believe for example this is the route my parents are likely to take. Lets assume my father dies first then my mother. You read that as only 50% able to leave an estate but clearly that is not what is happening. Like I keep saying most people do not have a good grasp of data you are surely a few levels above bag of wind but you take too much at face value without understanding the data you are looking at

Note this does not include pensions which are outside of Inheritences

My mistake, not 'outside of inheritences', pensions are outside of estates. Of course a person can inherit their parents pensions but it is not in their estate as it is a form of trust. Or at least that is my understanding


Edit: The rules of intestacy will also mean most people without a will will have most of their assets automatically transferred to the wife/husband which would not need grant of representation. So when grandpa dies it goes to grandma. When grandma dies it goes to the young ones. That stats show 1 person dies leaving no estate needing grant of representation, 1 person died leaving £300,000

Bags of wind and co come here crying look have to people have f.all when clearly that is not the case its just they dont understand the stats

ukcarper

GreatApe wrote: »

Why would you expect more than 50% of deaths to leave an estate that need needs grant of representation?

First of all children and the young die too especially young children

More importantly many deaths do not need a grant of representation as the person who dies leaves it all to their spouse. I believe for example this is the route my parents are likely to take. Lets assume my father dies first then my mother. You read that as only 50% able to leave an estate but clearly that is not what is happening. Like I keep saying most people do not have a good grasp of data you are surely a few levels above bag of wind but you take too much at face value without understanding the data you are looking at



My mistake, not 'outside of inheritences', pensions are outside of estates. Of course a person can inherit their parents pensions but it is not in their estate as it is a form of trust. Or at least that is my understanding


Edit: The rules of intestacy will also mean most people without a will will have most of their assets automatically transferred to the wife/husband which would not need grant of representation. So when grandpa dies it goes to grandma. When grandma dies it goes to the young ones. That stats show 1 person dies leaving no estate needing grant of representation, 1 person died leaving £300,000

Bags of wind and co come here crying look have to people have f.all when clearly that is not the case its just they dont understand the stats

You don't need a grant of representation if your estate is small or if you a spouse and all assets are jointly owned, just leaving everything to your spouse does not mean you don't need a grant of representation.