To think the Uk will move to an iheritocracy

[nappyvalley1992]

In the UK (especially the south east) PAYE earnings seem to increasingly play little part in overall wealth and what matters more of background/family wealth and increasingly the only path to a comfortable middle class life is via inheritance.

I am a late millennial of the south east whose parents own a very average home worth £1 million which under current rules I should inherit tax free. It's a similar story for almost all of my friends (amount almost equivalent of a lottery win). My parents were not even very middle class and had average jobs, they have just got lucky through house price inflation. Its not often spoken about, but I can foresee a wave of very wealthy millennials emerging in the next 15-20 years, and increasingly it wont really matter what someone earns in their day job, the biggest determinant of wealth will be those who are lucky enough to inherit.

Some millennials might even inherit large sums 2 or 3 times via grandparents, and inheriting from parents on both sides of the couple.

Will the government eventually start taxing inheritance more or what will the future look like in this area?

Tell me about it. My parents paid £1k a week each nine years ago. Fortunately most people aren’t there long, the average stay is less than a year.

According to the NHS 44 percent of people aged 85 or older need some sort of care. I personally know quite a few people who need fairly intensive levels of care in their 70s and I think this is becoming more common. Dementia seems to be on the increase and hitting people earlier ( 7.5 percent will get symptoms before age 65). People getting dementia earlier are likely to be physically fit, relatively speaking, and last a lot longer whilst requiring increased levels of (very expensive) care. I know several families facing this reality.

@IAmNotALoon Yes, DH’s Grandma lived until 93, because physically, she was fine. Mentally, she was confused for the last 10 years, it was very difficult for his family, she wandered off regularly. 🙁

Yes it becomes so stressful trying to keep someone with dementia safe. I have seen my mum and now my MIL worn out with it all particularly when they can't sleep and keep wandering off.

15% need residential care at 85 or over.

@Blanketyre I think @IAmNotALoon was just making the point that carers in your home are very common as well, and they’re not inexpensive either.

Care, whether residential or not is expensive. Why do you think the Labour government has shelved the plans to place a cap on care costs and why do you think the Conservative government didn't get around to implementing it?

Exactly I’m 53 and my brother is 56 our parents are both 76 we’ve told them to spend away and don’t worry about us.

Exactly. I am not in line for much of an inheritance ar all (my parents rent and are on a low income - I may get some furniture or my dad's stamp collection). But I would be mortified if I thought they were going wirhout good care or even just nice things in their old age they could easily afford in order to give me a bigger inheritance.

I think the point of inheritance is that it skips a generation i.e. grandparents give to grandkids. So today's 45 year olds would most likely have got something from their grandparents in their 30s for that house deposit. So they have inherited.....now what happens when those grandkids dont have any deposit funding but still cant save up?

@Ginmonkeyagain me too- far too many people who haven't got much out themselves in that position- I would rather in their 70sand 80s those who are asset rich but cash poor drew a bit down on their houses

That isn't relevant to the PP's point.

Home based care can be just as expensive, sometimes more so, than residential care. Residential care is just a proportion of people paying for care.

I agree @Crikeyalmighty and that’s why I find it frustrating that there’s no incentive tax-wise to downsize if someone wishes to. All it does is create a bottleneck in the housing market. It’s fine if they’re still active or the house is well-suited to adaptations, and the area has good transport links, but not so great if that’s not the case.

Several of my elderly relatives downsized to condos in locations with easy access to facilities before they became very elderly and it’s working out well for them. Of course people should stay in their houses if they wish to, but not if they’re struggling in order to hang onto an asset to pass to their children.

But you don't have to sell your house to pay for it. If you have capital below a certain amount excluding the value of your house, the LA will provide domiciliary care, levying a charge based on income. Capital in the house is preserved for eventual inheritance.

Evilartsgrad · Today 12:44

C8H10N4O2 · 24/10/2024 11:56
That isn't relevant to the PP's point.
Home based care can be just as expensive, sometimes more so, than residential care. Residential care is just a proportion of people paying for care.
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But you don't have to sell your house to pay for it. If you have capital below a certain amount excluding the value of your house, the LA will provide domiciliary care, levying a charge based on income. Capital in the house is preserved for eventual inheritance.

Tell me you have zero understanding of the practical realities of elderly care without telling me that you have zero understanding of the practical realities of elderly care

I think you’ll find that isn’t the case.

https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/do-i-have-to-sell-my-home-to-pay-for-care/

@BruFord yep- my father in law at 85 has sold and will hopefully be moving to a very nice bungalow from a chalet style house , will be within 25 minutes of us rather than 4 hours. Shop, pub, medical centre and bus stop all within 5 minutes walk in a mid sized pretty ' funky' town - he says he wants a bit of life !! We aren't in a cheap area and he will still be banking about £120k too - he's being very practical and saying he would rather have good money ready in the bank so can pay for any extra help needed at home if necessary. At the moment he doesn't- he also said if he needed residential care it's easier to have cash available and not to have to panic about houses selling immediately etc - PIA ( not activated) already done- I really admire his 'practicality' and forward thinking. He's also had an enormous clear out already .

Sorry are you responding to me or @Evilartsgrad ?

I've organised care of differing types for several elderly relatives - home care can very much be at least as expensive as residential, more expensive for 24hr care.

It also wasn't true last time I was involved in organising home care that the cost of care was supplied by LA without impinging on the house capital - a charge was taken to be recouped on death.

@Crikeyalmighty Sounds similar to my Dad (86). He couldn’t really manage after my SM died and they were in a village so had to drive everywhere. Now he’s in a lively town and has everything on the doorstep. He has a cleaner/light housekeeper to keep things in order…he’s not a naturally tidy person. 😂

Plus they had SO much stuff. We had to put some in storage when he first moved as we couldn’t sort through it all in time, we did eventually. It was a good life lesson for me-don’t hang onto absolutely everything. 🤣

@BruFord you only have to read the elderly parents thread to realise we are in the minority it seems - my FIL is going to Frome ( fingers crossed) originally I thought it might be a bit 'hip' for him but he really liked it- he couldn't afford what he wanted here in Bath , nor was anything remotely around as he wouldn't have a flat- but it's a good compromise- he never really liked where he's been last 15 years but was his partners choice as she was from area- that too is a village and all the facilities have been shutting one by one - so to be honest it's now just not suitable at all - and 6 miles from nearest place of any size.

Unless the parents organized it so rhat couldn’t happen ie left their share to children with spouse living in house for the rest of their life. So only half would be used for care fees if the surviving spouse needed residential care.

I am amazed it’s only 15 percent considering the amount of care homes and they all seem pretty full. .

They’d be extremely stupid to do that if it meant they’d pay inheritance tax on the first estate. Everything passed to a spouse is free of IHT and any unused allowance is transferred. Most people would rather the money was used for their parents’ care than paid in tax.

They’d only pay IHT on over 500 000 on the deceased parent’s share. And the same on the remaining parent’s share should they inherit from them. If the estate ( house) was over a million they’d pay tax anyway when both parents died so i can’t really see the difference, except in the relatively few cases were half the house is worth more than 500 000 they’d have to pay tax immediately rather than selling to pay it ,but it’s hardly the majority of people.

There is a new book about that very thing: https://www.amazon.co.uk/Inheritocracy-Should-Talk-about-Bank/dp/1785908588 I saw the author interviewed on youtube and it was interesting.

I think there is a lot of truth in it. I am from a working class background but DH and I both have good jobs but when it came to buying a home we absolutely couldn't afford to buy in the same area as our university friends because so many of them had family money to fall back on. I also found that with many of them their parents had had them a bit later so early 30's vs early 20's (my parents were both 21 when I was born, yes they were married) so when I had my kids in my early 30's they were still working full time while my friends from middle class backgrounds often had parents who were retired or partially retired (due to more money and better financial security) and were able to help with childcare.

Then there is the issue of private schools there is no way we can afford to send our kids to a private school but several of my friends have parents who are paying school fees for their grandchildren.

It is harder than ever to maintain a middle class lifestyle these days and it usually does take two people of the same kind of background who both stand to inherit perhaps hundreds of thousands or more to ensure their kids will go on to have all the privileges and benefits of that class.

Also see this video which explains that the concept of meritocracy is a bit of a myth and that countries like the UK are pretty much the worst places for social mobility globally