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.”

Nationwide have announced a reduction to their 5 year fixed term interest rate for any property which holds equity of 30% or more. The rate on offer is 3.69%, but incurs a fee of £999, however the rate would be £99 with a higher rate of 3.89%.

Nationwide will also offer a 0.1% rate reduction for any new mortgage applications. Martyn Dyson, a spokesperson for Nationwide, said: “We know from our mortgage consultants and brokers that five-year fixed rate products are popular with borrowers, so our latest rate reduction ensures our deals continue to be amongst the most competitive in the market place.”

Leeds Building Society have also recently announced interest rate cuts on their two year and three year fixed term deals. For their two year fixed term rates, they have announced a rate of 3.5% on properties with 15% equity and 3.14% for those with 20% equity. For their three year fixed term deals, they offer 2.94% for mortgages with 25% equity, 3.49% for 20% equity (a market leader) and 3.79% for 15% equity.

Kim Rebecchi from the Leeds Building Society indicated that the current interest rates were at a historic low and has indicated that many customers are looking for “security, peace of mind and longer term value.” He has indicated that they have offered further cuts across a variety of Loan To Value (LTV) bands. These cuts include a rate of 2.45% for properties with 40% equity and a rate of 2.75% for properties which hold 25% equity.

In response to the current market, the HSBC have also announced a new five year fixed term deal for properties with 40% equity. The rate offered is 3.34%, but attracts a fee of £999.

The Chelsea Building Society have revealed a market leading change to its five year fixed term mortgage for properties with 30% equity. The rate has been cut to 3.29%, although this attracts a higher fee of £1,495. The rate of its five six seven mortgage, which allows the borrower to choose the length of the fixed term, has also been cut from 3.99% to 3.69% – another market leader.

Chelsea have also launched the cheapest available 10 year fixed term mortgage deal. This offers a rate of 3.99% and is available for properties with 30% equity value. However, the fee is £1,495, although, this fee can be reduced to £195 for people who take a 4.19% rate.

However, Lee Karasavass from Prolific Mortgage Finance suggests that there is not much of a market for 10 year fixed term deals, although it’s understandable that in the current economic climate, these deals would be attractive to many people who know that they will not move house in the near future.

Some experts suggest that the new deals indicate that a rise in the base rate of interest may not occur for a while yet and that the low interest rates are adding to the competition and providing a great opportunity for buyers. Customers should take every opportunity to shop around to get the best deal for them.

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.

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.