People born between 1997 and 2012 given £80 alert with April 2027 change

Young adults are being warned not to bank on a future inheritance based on fresh research.

Nearly one in four Gen Z adults – those born between 1997 and 2012 – admit they are not focusing on saving for retirement because they expect to inherit money or property from their family. But the hoped-for windfall may never materialise. Research by retirement specialist Standard Life found that one in seven parents (15%) now plan to prioritise enjoying their money during retirement rather than preserving it to pass on to their children.

The findings expose a growing gap between the expectations of younger generations struggling with housing costs and living expenses, and parents who are increasingly determined to spend their hard-earned savings themselves.

The study found that 23% of Gen Z respondents are relying on inheritance as part of their retirement plans. Among millennials, born between 1981 and 1996, the figure was also high at 20%. However, many parents appear to have other ideas.

One in seven said they intended to focus on "living for today" rather than leaving money behind, while forthcoming inheritance tax changes are also reshaping retirement planning.

From April 2027, most unused pension funds and pension death benefits will be brought into the value of an estate for inheritance tax purposes. As a result, almost three in 10 parents (29%) said the changes would influence how they use their pension savings.

Around one in 10 (10%) said they would be more likely to spend their pension savings during retirement rather than leave them untouched, while 22% said they would be more inclined to gift money during their lifetime.

Mike Ambery, retirement savings director at Standard Life, warned younger generations against treating inheritance as a retirement strategy.

He said: "Inheritance can play an important role in family finances, but it is risky for younger people to build their retirement plans around money or property they may never receive.

"At a time when many are dealing with higher living costs and financial pressures, it's understandable that some may look to inheritance as part of the picture - but it's far from guaranteed.

"With people living longer and later-life costs rising, many parents may understandably want or need to use more of their savings during retirement. With this in mind, inheritance should be seen as a possible bonus, rather than a substitute for building your own retirement pot.”

The warning comes as experts continue to stress the importance of starting pension saving early, allowing contributions to benefit from decades of compound growth.

Workers can also boost retirement savings through employer pension contributions and pension tax relief.

For a basic-rate taxpayer, every £80 paid into a pension is topped up to £100 by the Government through tax relief, with higher-rate taxpayers able to claim further relief.

The figures suggest that while younger Britons may be hoping for a future windfall, many parents are increasingly planning to spend their money themselves – potentially leaving the inheritance cupboard far barer than their children expect.