Over 50s told to help the young with living costs as nearly two-thirds of their weekly budgets is just for basics
- Under-35s spend around £203 on basics like housing, utility bills and transport
- That is the largest amount of any age group
- Only 13% of over 50s knew reality of financial pressures facing younger people
The over-50s are seriously underestimating how much younger relatives are forced to spend on daily essentials – and are encouraged to boost financial support where possible.
The message comes from a new study due to be published this week by charity the Intergenerational Foundation, together with Yorkshire Building Society.
It shows the vast majority of older people are completely unaware that under-35 households spend nearly two-thirds of their weekly budgets on basics.
The vast majority of older people are completely unaware that under-35 households spend nearly two-thirds of their weekly budgets on basics, according to a survey
Only 13 per cent of those quizzed knew the reality of financial pressures facing younger people.
In a typical week, the under-35s spend £203 on fundamentals including housing, utility bills and transport – the largest proportion of any age group.
Once told of these figures, a quarter of over-50s said the revelation made them want to give more financial support to a younger relative.
Angus Hanton, co-founder of the Intergenerational Foundation, says: ‘Rather than being a generation of latte-drinking, country-hopping spendthrifts, young people today are under serious financial pressure from precarious employment, stagnating wages, high housing costs, sky-high student debt, high energy bills and the cost of domestic transport.’
Households run by people in the 51 to 65 age bracket spend a smaller proportion of weekly expenditure on essentials than households in any other age group.
Hanton adds: ‘Younger people face major challenges to put money aside and save for a rainy day. We have to do more so that different generations can help each other when they need it most.’
More than 70 per cent of over-50s involved in the study were also unaware they could pass on £3,000 a year in cash gifts, free of tax
More than 70 per cent of over-50s involved in the study were also unaware they could pass on £3,000 a year in cash gifts, free of tax.
This is known as an ‘exempted gift’ under inheritance tax laws. So when someone passes away, cash gifts of £3,000 a year are not counted when adding up how much inheritance tax is paid from the value of their estate.
The IF charity is campaigning for this limit to be raised to £11,900 – a figure that would exist now had it been uprated in line with inflation since 1981, when it last increased.
Chancellor Sajid Javid hinted at Inheritance Tax changes at the Conservative party conference.
Other ‘exempted’ cash gifts that can be given away each financial year free of tax include wedding or civil ceremony gifts of up to £1,000 per person, £2,500 for a grandchild or great-grandchild and £5,000 for a child.
Normal gifts from income that do not dent a person’s living standards are tax free.