It reveals that the typical wealth of home-owning grandparents is in the £400,000 - £500,000 range, and that they plan on average to share this between four and five recipients.
Those from the baby boomer generation are expected to be the first to benefit from the windfall, although it is though that they will then pass it onto their millennial children rather than spend it on themselves.
“There is a wall of housing wealth set to cascade through the generations in the coming years,” Royal London director of policy, Steve Webb, said. “Grandparents still attach great importance to passing on their wealth rather than consuming it.
“Many in the next generation feel under considerable pressure to pass any inheritance straight on to their own children as they are acutely aware of the challenges faced by their millennial offspring”.
The research involved a survey of over 5,000 people from three generations – a ‘grandparent’ generation of 65-85 year-old homeowners, a ‘sandwich’ generation of 45-64 year-olds, and a ‘children’ generation of 25-44 year-olds.
It was found that the ‘sandwich’ generation felt the most pressured to pass wealth on, with two in five saying so, in comparison with less than one in five from the ‘grandparent’ group.
More than half of the ‘children’ generation have already received a lump sum from their parents, but millennials who benefit from the wealth windfall are likely to be in a minority among their peers, according to the research.
It shows that only 4 of the 17 million people from this age group have grandparents with housing wealth, and argues that the government should develop policy that helps those who will not benefit from an inheritance.
“Those Millennials lucky enough to have home-owning parents and grandparents may be set to benefit from significant inheritance which will help them onto the housing ladder. But the majority are not in that position,” Webb continued.
“Schemes such as the Lifetime ISA which provide a government contribution of £1,000 per year for those who have £4,000 per year to save, will tend to favour precisely those groups who already have access to wealth.
“There is a danger that this will reinforce the advantage of those who are set to benefit from a cascade of wealth from the older generations.”
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