Half of 2012 retirees expect to leave an inheritance

Nearly half of those planning to retire in 2012 hope to pass assets on to family members in the form of an inheritance, research from Prudential has shown.

The online survey, which questioned 2,000 individuals who were about to, or had already, retired, found that 49 per cent of individuals still planned to leave an inheritance despite the recent squeeze on personal finances.

Whilst the majority of retirees hoped to leave an inheritance, one in 12, however, would cancel their inheritance plans if their financial circumstances became difficult.

Boosting retirement income was also a concern for many of those surveyed, with 33 per cent saying they would consider selling the family home and 29 per cent admitting they would consider returning to work.

The mixed messages from retirees suggest that despite optimistic plans regarding inheritance, many remain concerned about their future retirement income.

Alternative research from the National Association of Pension Funds (NAPF) indicates that public confidence in pensions has fallen to an all-time low. The drop in confidence to minus 17 per cent on its index is due to low trust in the pension and annuity industry, poor rates, squeezed household incomes and stock market volatility, according to the NAPF.

Matthew Stephens, a spokesperson for Prudential, reiterated that planning is crucial in the run up to retirement if retirees want to leave an inheritance.

"Being able to leave an inheritance is important to many people and our research shows that despite the squeeze on living standards, nearly half are confident they will be able to fund their retirement and still leave money or assets to their loved ones," he said.

"The inheritance tax threshold has been frozen at £325,000 until 2015, meaning that many people will potentially face a tax bill if they do not plan ahead.

"To ensure it's possible both to leave an inheritance and secure a comfortable retirement income, it's vital to seek professional financial advice well in advance of your intended retirement. Saving as much as possible, as soon as possible, will also help people to meet the retirement provision that they need."

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