Financial support from family is helping young people get onto property ladder
Media release July 2023
New research shows a staggering 95 percent of Millennial homeowners received financial help to own their own home, closely followed by Gen Z homeowners with 79 percent receiving help.
Young people receiving financial assistance, in some cases called ‘early inheritance’, changes the face of what legacies look like further down the track.
It also contributes to increasing the wealth gap, with young people who are not able to receive financial support from their family less likely to be able to get onto the property ladder.
And with home ownership rates declining, intergenerational wealth is expected to decline as a result as individuals and families will have fewer large assets to pass on.
When combined with other complexities - like the high cost of housing, the increase in blended families and separations, or if early inheritance is given unevenly between children – this paints a bleak picture for younger New Zealanders.
· 52 percent of Gen Z listed access to affordable housing as one of their three biggest concerns for the future, along with 30 percent of Millennials.
· 39 percent of our survey respondents say their biggest concern is not having enough for their own comfortable retirement.
· Even younger generations are already seeing the financial benefits of inheritances, with 41 percent of Gen Z and 46 percent of Millennials reporting having received a financial legacy already.
· When it comes to protecting their legacies, only 16 percent of Gen Z and 31 percent of Millennials have a will, compared to 81 percent of Baby Boomers.
“These insights show the impact the cost of housing is having on families and their legacies – for so many younger people, the only way into home ownership is with financial support from others,” says Glenys Talivai, CEO, Public Trust.
“This can put significant pressure on many Kiwi families who, if they are able to, want to financially assist their children into homes but many are also mindful of the large amounts of money they may need saved for their own retirement.”
“People are living longer, and this means retirement savings need to last significantly longer than previously.
“With almost half of New Zealanders reporting a level of financial discomfort, our ability to plan for the future is diminishing. Additionally, as we live longer, we leave less financial security as a legacy,” adds Glenys.
“The research insights continue to reinforce the importance of having conversations about death, money and the future with those you love, even if they are difficult. Talking about money and what happens when you die is not an easy discussion, but having a will in place, as well as a Statement of Wishes outlining why or how you came to the decisions, can be beneficial and save your family a lot of stress when you die,” says Glenys.
About Public Trust Public Trust, which marks its 150-year anniversary this year (2023), is a Crown entity employing over 400 people across our corporate offices and network of customer centres.
Our purpose is to empower all New Zealanders to build and protect their legacies. We do this through our work as New Zealand’s largest provider of estate planning and management services. We are also one of the country’s largest charitable trust administrators and advisers, helping more than 420 charities to set up trusts and distribute funds back to our communities.
Our investment team manages around $1.2bn of funds, primarily for charities, estate beneficiaries and students (through our Fee Protect service). Public Trust’s Corporate Trustee Services offer some of Australasia’s best-known institutions a full range of trustee services and we supervise a number of KiwiSaver and superannuation scheme providers.
About the research To better understand and quantify New Zealanders attitudes and actions around intergenerational wealth, Public Trust commissioned a quantitative survey of more than 1,000 Kiwis 18 years and over.
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