Here’s a number to catch your attention… I’ve calculated that Rotherham’s Millenials are set to inherit £199,566 each in property! Huge numbers, but is all that it seems?
But before we start it’s important to define all these phrases that get banded about the different life stages (or subcomponents) of our society. What are millennial? Who is Generation X or Generation Z or the Baby Boomers? When terminologies like this are used as often and habitually as these phrases, it’s particularly vital we have some practical idea of what these terms actually mean. People use these phrases but don’t really know what they mean! I’ve used them but haven’t been exactly sure where the lines were drawn!
So, for clarity…
Generation Z: Born after 1996
Millennials: Born 1977 to 1995
Generation X: Born 1965 to 1976
Baby Boomers: Born 1946 to 1964
Silent Generation: Born 1945 and before
Even these dates tend to blur slightly around the edges and are sometimes contested.
Examining Rotherham by generation
Using these definitions, my research shows there are 12,218 households in Rotherham owned by Baby Boomers and the Silent Generation. It also shows there are 21,361 Gen X homeowners.
Looking at demographics, homeownership statistics and current life expectancy, around two-thirds of those Rotherham 21,361 Gen X homeowners have parents and grandparents who own the 12,218 properties.
These Gen X homeowners are therefore going to profit from one of the biggest inheritance explosions of any post-war generation to the tune of £1.788bn of Rotherham property or £125,458 each… but they will have to wait until their early 60s to get it!
What about Millennials?
It’s the Millennials that are in line for an even bigger inheritance windfall!
There are 16,238 Millennials in Rotherham and my research shows around two thirds of them are set to inherit the 14,774 Gen X properties. Those homes are worth £2.161bn meaning, on average, each Millennial could inherit £199,566… but again, not until at least 2040 and maybe as late as 2060!
While the Rotherham Millennials have done far less well in amassing their own savings and assets, they are more likely to take advantage of an inheritance boom in the years to come.
This will probably be very welcome news for those Rotherham Millennials, including some from poorer upbringings who in the past would have been unlikely to receive gifts and legacies.
Inheritance is not the magic solution for Rotherham Millennials
Of course, inheritance is not the magic weapon that will get the Millennials on to the Rotherham housing ladder or tackle growing wealth cracks in UK society. Inheritance is unlikely to be made available when people from this generation are trying to buy their first home.
Correspondingly, over 50% of females and around 35% of men are going to have to pay for nursing home care, which will reduce inheritance significantly. Interestingly, I read recently that a quarter of people who have to pay for their care, run out of money.
Therefore, if you are a Rotherham Millennial there potentially will be nothing left for you.
Is there a solution to help our Millenials?
Most parents want to give their children an inheritance. The thought that what you have worked hard for throughout your life not going to your children is a really awful one.
Maybe that’s why I am seeing a lot of Rotherham grandparents doing something meaningful and helping their grandchildren, the Millenials, with the deposit for their first house.
One solution to the housing crisis in Rotherham (and the UK as a whole) is if grandparents, where they are able to, help financially with the deposit for a house.
Buying is cheaper than renting – we have proved it many times in these articles… so it’s not a case of not affording the mortgage. The issue for Millenials is saving for the 5-10% mortgage deposit that is required.
Maybe families should be distributing a part of the family wealth now (in the form of helping with house deposits) as opposed to waiting to the end… it will make so much more of a difference to everyone in the long run. Just a thought – what do you think?