Younger Australians are anticipating substantial inheritances in the coming decades, but multiple data sources suggest their expectations may be significantly inflated. A recent national survey indicates that individuals under 30 expect to receive large financial transfers from older generations, though actual figures remain uncertain.
According to SBS News, the projected amounts cited by young adults appear disconnected from the data currently available on intergenerational wealth transfers. While the scale of upcoming inheritance flows is expected to be large, research highlights inconsistencies between perception and reality. These findings raise questions about timing, distribution, and the broader economic context surrounding inheritance.
Survey Shows Gap Between Expectations and Plans
An August 2024 survey from Colonial First State (CFS), conducted among 2,250 Australians aged 18 and over, found that those aged 18 to 29 expect to receive an average inheritance of $525,000. Expectations remained high in the 40 to 49 age group, with an average of $547,667. In contrast, respondents aged 65 to 74 expected to receive significantly less, averaging $167,624.
Young people are hopeful about receiving financial support in the form of an inheritance due to rising living costs, stagnant wage growth and housing pressures – said Kelly Power, chief executive at CFS.
The same survey revealed that 82% of Australians intend to leave an inheritance to their heirs, yet only 38% currently have a will in place.
The Reality of Inheritance Distributions
Data from the Productivity Commission shows that $1.5 trillion has been passed down through intergenerational wealth transfers in the last two decades, with around 90% of this amount delivered via inheritance. Looking ahead, estimates suggest a further $3.5 trillion could be transferred over the coming decades.
Despite the magnitude of these totals, inheritances are not reaching younger Australians in the way many expect. According to the HILDA survey (Household, Income and Labour Dynamics in Australia, University of Melbourne), most recipients are over the age of 55, receiving an average of $275,619. Among Australians aged 25 to 34, only 1.5% received an inheritance, and the average amount was just $50,508.
Inheritances are not going to be that large for most people – said Matt Grudnoff, senior economist at the Australia Institute.
It might help you in your retirement, but I don’t think it’s going to radically change whether or not you can buy a house or help you through most of your life.
Homeownership and Hope-Based Expectations
The growing dependence on inheritance as a financial solution is largely tied to property affordability.
Young people are relying on an inheritance to get into the property market, a need born out of desperation – Grudnoff said. He added that people often overestimate the size of future inheritances, making assumptions
based on hope and not reality.
This sentiment is echoed in broader economic data. The 2024 Inequality Report by the Australian Council of Social Service shows that the wealthiest 10% of households control 44% of the nation’s total wealth. Households led by people aged 65 and over are, on average, four times wealthier than those headed by Australians under the age of 35.
In the past, inheritance was a way of redistributing wealth, but increasingly wealth is being concentrated in smaller and smaller groups, so effectively this is going to flow to a very small minority of people – said Grudnoff.
Importance of Transparency and Planning
While intentions to pass on wealth remain high, the lack of formal planning may add further uncertainty for future recipients. According to Craig Day, head of technical services at CFS, open conversations within families are critical.
By having these conversations early, families can ensure that everyone is on the same page and can make informed decisions that align with their values and goals – Day said.
It’s not just about passing on wealth — it’s about passing on clarity. Families need to talk about their intentions, their needs, and their plans.
