Parents won't have wealth to pass on, report

[The Lawspeaker]

Parents won't have wealth to pass on, report
Future generations should not expect to inherit wealth from their parents following the ravages of the worst financial crisis since the 1930s, a new report has warned.

Of 6,010 Europeans questioned, just 10pc said they were actively intending to pass on "significant wealth" to their children, according to a survey of consumer finances by Janus Capital Group.

A further 42pc said they had no intention of doing so, while the remaining 48pc said they were unsure.

The survey claimed the financial crisis has produced a generation of under-saving, risk-averse Europeans, which will challenge the future of "inter-generational wealth transfer".

The responses of adults from the UK, France, Germany, Holland, Spain and Italy, showed the financial crisis has "fundamentally challenged the norms of financial wellbeing", according to Ric Van Weelden, head of Janus Capital's European business.

"Specifically, the report highlights how few Europeans are likely to have made adequate provision for their retirement, let alone passing on wealth to the next generation. The financial services industry will have a very different landscape to serve going forward," he said.

Many who were relying upon returns from their long-term investments for later life and to pass down as inheritance have seen values wiped out, and extended life expectancy is placing additional pressure on finances.

Of the six nations that took part in the survey, French respondents were most likely to pass on wealth, while their Spanish and German counterparts were the least likely.

In the UK, 16pc said they intended to pass on significant wealth to their children, 44pc said they had no intention and the remainder said they were unsure.

David Bowers, of Absolute Strategy Research, which carried out the survey for Janus Capital, said: "Inter-generational wealth transfer is something we have taken for granted.

"This is one generation when it may not happen as smoothly."

The report said that at present in the UK, the average estate is worth £90,000 and divided five ways, but Janus Capital said that is likely to change, with those aged 45 to 54 unable or unwilling to save sufficiently.

"The financial crisis has exacerbated a tendency to under-save and to be risk averse.

"Europe's working population has yet to wake up to the fact that it will not be able to retire as early as it would like, and indeed may have to work a lot longer," Mr Bowers said.

[Alison]

My mum thought she had adequately provided, through savings, investments and policies, for her retirement and her children. She finds herself in a position where she simply cannot make ends meet, and despite her embarrassment, we, her children, help her out financially.

I don't really see the point in people planning for their childrens futures. After all, by the time a person dies from natural causes, the children should be making their own way.

[Austin]

The West won't last in it's current state in respect to it's coveted middle class populations that have previously been the envy of the world.

In the U.S. there are already surpluses in the millions of twenty somethings with graduate degrees or higher with no job to go to for the simple fact that the middle class in the West is not growing but instead dwindling. You add to that reality the fact that there are twelve million plus illegal aliens competing for lower/medium end jobs who will work harder and longer and for less. Add to those two realities the third fact that there are now several million skilled/experienced 30-55 year old's who are now unemployed and looking for work at reduced wages/benefits. Only then do you begin to realize the severity of the looming internal plunge so to speak.

Only way to get a decent job after college now is to have connections or have -flawless- grades and even that won't boost you much due to there being so many graduates that every other one seems to have flawless grades it seems.

[SwordoftheVistula]

The West won't last in it's current state in respect to it's coveted middle class populations that have previously been the envy of the world.

In the U.S. there are already surpluses in the millions of twenty somethings with graduate degrees or higher with no job to go to for the simple fact that the middle class in the West is not growing but instead dwindling. You add to that reality the fact that there are twelve million plus illegal aliens competing for lower/medium end jobs who will work harder and longer and for less. Add to those two realities the third fact that there are now several million skilled/experienced 30-55 year old's who are now unemployed and looking for work at reduced wages/benefits. Only then do you begin to realize the severity of the looming internal plunge so to speak.

Only way to get a decent job after college now is to have connections or have -flawless- grades and even that won't boost you much due to there being so many graduates that every other one seems to have flawless grades it seems.

Very true. I think the 'Tea Party' is the political fightback of this middle class which is being eliminated. If that fails to take power, there will be fightback by other means.

[Debaser11]

Only way to get a decent job after college now is to have connections or have -flawless- grades and even that won't boost you much due to there being so many graduates that every other one seems to have flawless grades it seems.

Boy, do I know this. I used to teach English abroad. I get calls and emails all time from people (college grads) wanting to do the same. The pay is actually better and the jobs over there require MUCH less work. Teaching in a place like Korea or Japan used to seem insane to an American. Not anymore. And it's not simply just because Americans are more open and liberal "to other cultures and stuff" now.

[Austin]

Very true. I think the 'Tea Party' is the political fightback of this middle class which is being eliminated. If that fails to take power, there will be fightback by other means.

Well I think it is also more the fact that the people who had kids in the 80's and 90's are now realizing "oh my god we just spent 40k on his/her education and now he/she might go 4-5 years without a decent paying job". It is the parents, the aging middle class that remains that is really going to suffer financially let alone the middle class that never was/will be. The parents just invested tons of money into educating their children and now they tell them to live at home and save rather than move out and bomb financially, times have changed big time.

Most college grads just live with their parents because you can't pay rent/food/gas/insurance/other costs and live a middle class lifestyle with a low end job. Live with parents in their nice middle class world or live in a hell hole and barely get by......hmmmmmmm what do you think most choose to do lol........., considering the norms of most middle-class families. Hence the costs are passed on to their parents who suffer more and more.

Out of my friends I tried to think and none but three live on their own and they don't even pay for their living costs their parents do. Most my friends my age still live at home and just save their money and party. It is amazing how different my generation actually is when I really think about it compared to my parents generation. It isn't as if my gen has much choice though the jobs just aren't there as they were for our parents in large part. I don't think any comparison can really be made the times are very different not just economically but culturally as well.

[Alison]

The West won't last in it's current state in respect to it's coveted middle class populations that have previously been the envy of the world.

In the U.S. there are already surpluses in the millions of twenty somethings with graduate degrees or higher with no job to go to for the simple fact that the middle class in the West is not growing but instead dwindling. You add to that reality the fact that there are twelve million plus illegal aliens competing for lower/medium end jobs who will work harder and longer and for less. Add to those two realities the third fact that there are now several million skilled/experienced 30-55 year old's who are now unemployed and looking for work at reduced wages/benefits. Only then do you begin to realize the severity of the looming internal plunge so to speak.

Only way to get a decent job after college now is to have connections or have -flawless- grades and even that won't boost you much due to there being so many graduates that every other one seems to have flawless grades it seems.

Perhaps the expectations of the youth in the US is too high? If the immigrants are prepared to work longer hours for less pay, then obviously they will get the jobs.

If there are no jobs, why not start your own business? Lots of people start with very little, and build up.

That is true strength of character - not relying on parents to help out, but doing it yourself. Far more satisfying too.

[Austin]

Perhaps the expectations of the youth in the US is too high? If the immigrants are prepared to work longer hours for less pay, then obviously they will get the jobs.

If there are no jobs, why not start your own business? Lots of people start with very little, and build up.

That is true strength of character - not relying on parents to help out, but doing it yourself. Far more satisfying too.

Yeah that's great and all and I'm all for that. Some do that to some extent who can but you have to keep in mind these are middle class youth who largely never had a hard day in their life. Most have been in school for a solid 20 years with everything being prepaid at the desk or over the phone by their parents. Most have had only a few low end jobs here and there in between and many haven't even had a job yet in their entire life, believe it or not such individuals do exist in amazing numbers. They grew up on the story that they would get a 40k a year office job after partying and going to college as their parents did. They have no people skills, they can't talk on the phone with confidence or at all, they can't take criticism very well. They have no sense of saving at all because they never had to save or think of money so there is no sense of little everyday costs adding up.

You can't take someone like that and say go start a company or go compete with the works ten hours a day Mexican illegal immigrant who speaks Spanish to do construction work or whatever. It is like telling a fish to go live on land it won't happen and if it does the fish will die anyways. I've seen what happens when a middle class youth is given the cold turkey by their parents and thrown out there. They bomb completely financially and mess up their lives so horrendously that there parents come in and eat their costs and lose a ton of money in the process. (Remember middle-upper class children have been heavily invested in, one does not want to see their investment crash)

[Alison]

Gosh, Austin, that is scary. Methnks it's time for middle-class America to change their attitudes. That is BAD parenting. You raise your child to be independent and responsible. That's if you love them enough. Love is not about giving children what they want; allowing them to do what they want. Loving your children means disciplining them, giving them what they need, not want, and encouraging them to find their own way.

[Curtis24]

Keep in mind part of it is that the Baby-Boomer generation still owns most of the wealth in the country. I'm not excusing the behavior of many of the Millenial Generation(and I put myself in that category, still being supported by my parents), but there are larger economic forces at work creating this.