PREMATURE inheritance, just like premature ejaculation, can be a delicate and embarrassing subject to discuss. But it is increasingly common, and likely to cost Gordon Brown very dearly in years to come.
Pre-heritance is the latest insurance industry jargon for the gifts that parents are increasingly doling out while they are still alive, in lieu of an inheritance on their death. More than four fifths of Brits over 55, according to a recent survey by the number crunchers at Datamonitor, would prefer to give to their children or grandchildren before they die. Nearly half said that they would consider releasing equity from their homes in order to do so.
All this, of course, might be no more than an attempt to dodge inheritance tax, which is stealthily widening its clutches to encompass more families every year. But it is also an acknowledgement that marching into adulthood has becoming a costly business. Degree courses and weddings, essential if you want to keep up with your peers, are getting expensive. And then there is the pressure to give your little darlings a first heave on to the precarious housing ladder. More than half of home-owning parents of 18 to 29-year-olds, according to a recent MORI poll, said they didn’t think that their children would become homeowners without their support. The parents surveyed expected to bung their offspring up to £24,000 to help out.
Giving away a stream of handouts while still alive rather than a lump sum after death sounds like an entirely noble activity. It is surely more worthy than becoming a SKIER — the marketing acronym for the growing number of parents who would prefer to Spend the Kids Inheritance on bungee jumping lessons and expensive holidays. Then again, it might be part of the same basic phenomenon. Today’s middle-aged and elderly are more enthusiastic than previous generations to spurge their cash, and less keen to defer gratification of their immediate desires. At the same time, surrounded by the detritus of a lifetime’s accumulation of goods, they are rapidly losing interest in material possessions and are striving to acquire interesting experiences instead. Witness everything from the growth in middle-aged adventure holidays to the boom in adult education.
How does all this explain the shift in favour of pre-heritance gifts? Instead of presenting you with a windfall when they die, a growing band of today’s middle-aged and elderly would prefer to blow their capital on shared goods and shared experiences with you so that they can enjoy your reaction at the time. A good example is the growth of intergenerational travel, as parents treat children to expensive bonding holidays. That all expenses paid safari to Kenya with mother and father in tow? Just grin and bear it — and try to forget it’s coming out of your inheritance.