Shocking 70% of people waited until they were over 55 before making a will

Have you made your will?

New research from The Private Office shows that almost seven out of ten people (70%) waited until they were aged 55 or over to make their will, with one in three (36%) waiting until they were over 65. A worrying sign that people will be left with more than just the emotional burden following the early death of a loved one.

Figures increase to almost 85% of people waiting until they were at least 45 with just 1 in 10 people making their will between the ages of 35 and 44, the age at which most people will have already started a family.

This could leave loved ones with an additional financial headache that could be minimised or avoided with careful forward planning. With 90% of respondents in our survey holding an estate worth £325,000 or more, which includes property, savings and investments, given that any amounts over £325,000 could be subject to an IHT liability (excluding the main residence nil rate band) loved ones could be faced with a 40% tax bill on amounts passed down over the threshold. 

Encouragingly of those that hadn’t made a will yet, 60% say they plan to do so this year, meaning the current pandemic has put more urgency in people getting their affairs in order. 

Don’t leave it till it’s too late, plan with your loved ones now.

It’s no secret that the global pandemic has made us all more aware of our own mortality but hopefully this will act as a catalyst for the vast majority who would otherwise leave it shockingly late to make a will, particularly those with children. Plan ahead and think about your loved ones. Getting your financial and practical affairs in order now, will help them avoid having to deal with a financial and administrative burden at a time of great emotional distress.

Some people might defer writing a will because they think it’s unnecessary – either because they have no children, or their estate is not large enough to pay tax. But for anyone wishing to leave their money to loved ones, dying intestate could mean that they leave less to their beneficiaries.

For example, a single man with an estate of £300,000 would prefer to leave money to his nephews and he has mentioned this to his brother. But if he makes no will, on his death his money could in the first instance be given to his parents – and if they have an estate of more than £650,000 suddenly the estate could be taxed at 40%. A simple will could ensure that his loved ones receive more of what he planned to leave them.

This is where intergenerational financial planning is so important. Rather than simply looking at your own finances, planning with your loved ones can ensure that everyone is aligned and knows what to expect when the inevitable happens.

When do you have to pay inheritance tax?

Everyone has a £325,000 nil-rate inheritance tax band. If you are married or in a civil partnership, you have a combined nil-rate band of £650,000. 40% IHT is then payable above this threshold or 36% if you leave at least 10% of your net estate to charity.

An additional nil rate main residence band was introduced in April 2017 meaning up to £1million could be passed on to direct descendants.

Dying intestate

Dying without a will means there is a specific order in which a person’s estate can be dealt with and distributed and not all of the estate will nessasarily pass to a surviving spouse if they have children. Worse still for the 3.4m co-habiting couples in the UK who may not be entitled to anything at all.

The research reveals

• 36.2% waited until they were over 65 to make a will
• 67.8% waited until they were over 55 to make a will
• 83.9% waited until they were over 45 to make a will
• 90% of people made a will over a year ago
• 59% of people who haven’t made a will are considering to do so due to the Pandemic

The Private Office is running a series of intergenerational wealth Webinars - Keeping it in the Family - which explores the best ways to manage passing on wealth to your loved ones. These webinars will explore how to minimise taxes where possible and take away many of the stresses that need to be addressed in the event of death. Watch the recording of Keeping it in the Family - Part 1 here.

Register for Part 2 on the 23rd July 2020 at 11 am.

The Financial Conduct Authority (FCA) do not regulate estate planning, tax or trust advice.

Please note:
Research carried out on behalf of The Private Office to Savings Champion subscribers and includes 1,092 respondents from 23/5/20 – 15/6/20