Most over 55s believe the best inheritance they can leave their loved ones is good manners.

Property and money are other popular assets to pass on, according to a study by financial firm LV=.
Around one in four (25 per cent) do not expect to receive any inheritance – and three per cent of over 55s do not intend to leave their family anything.

The findings showed 59 per cent wanted to leave property and cash – but at 85 per cent, most thought good manners were more important than more worldly gifts.

The most popular use for any money would be to boost retirement savings (six per cent) or to stash in savings (six per cent). Another five per cent would spend an inheritance on clearing debts.

Besides financial gifts, good manners (85%), good behaviour (82%) and good values (82%) are the traits many would like to be remembered for. These attributes are also the ones most believe were passed to them by their ancestors.

John Perks, LV= managing director of retirement solutions said: “This research highlights a disparity between the number of Brits who are planning to leave some kind of financial asset behind for their family and those who believe there will anything left for them to inherit – this suggests that many may be pleasantly surprised.

“However, it is quite worrying to see that of those who are relying on an inheritance, one of the main reasons cited is the funding of their retirement. Given that we are all living longer, relying on an inheritance to fund your retirement is a rather risky strategy. In order to ensure a comfortable retirement, it is essential that people start saving as soon as possible. “If people do want to leave an inheritance for their family, it is important to seek expert advice on the relevant financial products that can help, and make a will as early as possible so that their intentions for their assets will be followed.”

Millions of pensioners and those approaching retirement age are now facing a peculiar dilemma: they own a property, which in many cases is worth several tens or even hundreds of thousands of pounds; and, their pension has fallen in value and thus fails to secure the quality of life for which they had planned.

The combination of longer life expectancy, increased taxes on pension funds and falling market returns and annuity rates means this situation will affect many more pensioners as they retire in the coming years. Only 10 years ago, a person retiring with a pension fund of £100k would have expected an income of over £15k pa compared to today when they would probably get nearer £8k pa.

Many people face genuine hardship. And even for those who are relatively better off, finding the cash for regular holidays, home improvements or the much-needed new car is a problem. Yet, in many cases the value of their home is substantial indeed and continues to increase significantly each year.

With the average house in the UK now worth over £100k (compared with £25k in 1980), this situation is frustrating and slightly ludicrous.

The solution – Equity Release

At last (it seems!), insurance and investment companies have taken account of the fact that property has proved to be a sound long-term investment. They have recently developed a range of products that enable pensioners to release (part of) the wealth tied up in their homes while still retaining the lifelong right to live in them. Most of the schemes will in effect lend you a portion of the value of your home in exchange for a share of it when you die. This enables you to benefit by releasing capital (cash) without you having to move home or sell up.

Not all schemes are the same and suitability will depend on a range of factors including age, health and family circumstances. Some schemes will pay a lump sum and others will pay an income for life in the form of an annuity.

The issue to consider here is whether or not you try to protect the value of your income by contractual annual increases. Such an agreement would be at the expense of a lower regular income from day one.

This is a difficult decision with no obvious right answer at the time you have to make it. For example, if you chose a higher immediate income with no annual increase and lived for only three years, it would have been the best decision. But even at today’s low inflation rates of around 3.5%, an income of £10k pa would be equivalent to less than £5k in 30 years time.

This implies that you ought to think the unthinkable – using all factors available (such as current health, family history, etc) to guess how long you and your spouse will live. Alongside this, you will want to take account of other investments, assets and sources of income and whether or not they will continue to be available, whether or not they will grow or diminish and whether or not they will support you and your spouse (last survivor) for life.

None of the schemes available provide for your income to increase with inflation (or RPI), but it is possible to invest a lump sum in a type of annuity that does.

Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!