People whose parents baby boomers warned they'll be receiving 'big bill'

A warning has been issued to people whose parents are "boomers" over an unwelcome bill amid the Cost of Living crisis. People who are inheriting from the baby boomer generation have been warned to expect big bills as a result of inheritance tax (IHT).

Chris Rudden, of investment platform Moneyfarm, said: “The average 35-44 year old has less than £7,000 in savings and they’re the first generation that’s poorer than the one before. Property prices are generally very high now, particularly in the south, where there are 600,000 properties over £1m.”

“If you’ve suddenly got £100,000 IHT to pay and only £20,000 in the bank, it’s not going to get you very far," he went on. “Many, many estates will have one of these properties, possibly even two, and would be way above the threshold with other assets.

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“A lot of the next generation don’t have the money sitting around to pay the tax, so they may have to sell the assets they’re inheriting.” He told the Telegraph: “That will negatively affect house prices, both for those selling and those not.

“We saw in 2008 and 2009 what falling house prices can do, particularly in the US. Either the Government will change the policy on IHT, or people may have to foot the bill for something they can’t afford. We could be looking at a property fire sale and the next generation is sleepwalking right into it.”

Harry Bell, of wealth managers Charles Stanley, said: “Being an executor is not an easy job and it’s very stressful. Often, they’re the children of the deceased, so they’re already in a fragile and difficult position and are constantly reminded they’ve lost a loved one.

“To add insult to injury, the IHT bill has to be paid within six months and probate usually takes longer than this. This often means money must be borrowed at punitive rates to cover the bill. If there isn’t enough cash in the estate, investments and property will have to be sold to cover the bill. This can be a long process, all while the funds borrowed are accruing more punitive interest.”