Millennials have had a tough gig so far. Hampered by high house prices, stagnant wages and large debts, they are lagging behind older generations in achieving life\u2019s big milestones.<\/p>\n
But there may be light at the end of the tunnel. Those born between 1981 and 1996 are expected to be the main beneficiaries of an unprecedented windfall over the coming decades \u2014 and the flow of money between the generations<\/a> has begun to accelerate.<\/p>\n Money newsletter<\/p>\n The latest personal finance and investment news from our money team.<\/p>\n \t\t\t\t\tSign up with one click<\/p>\n Lawyers and financial advisers have reported a surge in wealthy parents and grandparents transferring huge sums to younger relatives earlier than planned, preferring to give a premature inheritance they can see being enjoyed, with a better chance of the money avoiding tax. <\/p>\n Those in Gen X (born between 1965 and 1980) who haven\u2019t already inherited will also benefit, but some may lose out as their parents skip a generation and leave wealth to grandchildren instead.<\/p>\n John Roberts from Austin Lafferty Solicitors said: \u201cWe\u2019re definitely seeing an increase in clients accelerating gifts to children and grandchildren. The main driver is the prolonged freeze in inheritance tax thresholds combined with policy uncertainty \u2014 people are increasingly feeling that waiting until death is less tax-efficient than acting early.\u201d<\/p>\n The pension problem<\/p>\n The change of tack has in part been triggered by pensions being included in estates for inheritance tax purposes from April 2027. Until recently, those who could afford it could use other assets to fund their retirement and leave their pensions untouched to be passed free of inheritance tax to the next generation \u2014 but these funds soon risk being taxed at up to 40 per cent.<\/p>\n Remember that anything left to a spouse or civil partner, including pensions from 2027, is exempt from inheritance tax.<\/p>\n Laura Bywater from the solicitors JMW said: \u201cThe size of the silver spoon now matters more than ever. I have seen a significant number of clients who are shifting their wealth down earlier to the next generations and regularly see large gifts being made, often in the region of six-figures and beyond.<\/p>\n \u201cThere have been many recent instructions from clients about gifting shares in private businesses into trust structures, and some of these are in the tens of millions.\u201d<\/p>\n Stuart Carswell from the financial planner Pareto said he had seen a 300 per cent increase in inquiries about the rules on giving away assets over the past six months.<\/p>\n He said: \u201cMany of our clients had planned in advance and are now having to rethink and mitigate where they can.\u201d<\/p>\n The latest receipts show HM Revenue & Customs collected \u00a38.5 billion of inheritance tax in the 2025-26 tax year. The Office for Budget Responsibility expects this to rise to \u00a315 billion by 2030 thanks to the changes in pension rules, stricter reliefs for farmers and business owners and frozen tax thresholds.<\/p>\n The size and number of inheritances have grown exponentially as substantial wealth accumulated by baby boomers \u2014 who were born between 1946 and 1964 and are the richest generation in history thanks to a postwar economic boom and soaring house prices \u2014 is passed down. With younger generations having a harder time financially, the importance of inheriting money<\/a> has also grown.<\/p>\n The value of inheritances received each year now exceeds \u00a3100 billion, having doubled in real terms roughly every 20 years since 1979, according to Demos, a think tank.<\/p>\n Laurence O\u2019Brien from the Institute for Fiscal Studies (IFS), another think tank, said: \u201cInheritances are set to grow significantly as wealthier generations start to die, leading to larger differences between rich and poor and reducing social mobility for younger generations.\u201d<\/p>\n