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Squeeze on retirement incomes jeopardises inheritances

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Increasing numbers of people who are about to retire doubt whether they will be in a position to leave a legacy to their families.

A new study by Prudential has indicated that almost half of those polled (48 per cent) believe that they will not have sufficient funds for an inheritance.

A quarter were sure that they would not be leaving a lump sum for family members.

Indeed, only four out of ten of newly retired people who took part in the survey thought they had sufficient savings for their own comfortable retirements.

Gerry Brown, a trusts expert at Prudential, said: “Obviously the focus for retired people has to be on their own retirement income and so leaving a financial legacy can become a secondary consideration. Inheritances are increasingly in the ‘nice to do’ rather than the ‘need to do’ box because of uncertainty around being able to afford a comfortable retirement.”

“For those who do hope to leave a financial legacy there is a risk of assets that increase in value being left exposed to tax as the threshold for inheritance tax is frozen until 2015.”