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London and South East – a wealth and conflict hotspot
London has some of the highest levels of family conflict associated with wealth in the UK, with 41% of high net worth Londoners experiencing such conflict. Our research across the world has identified that wealthier individuals tend to experience more conflict, and it is therefore not surprising given the scale of wealth in the capital, that there are high levels of conflict. Conversely, experience of such conflict in the South East is just 29%, notably trailing the UK average of 37%.
When it comes to their usage of wills, the picture in both London and the South East is much more aligned, with 90% of individuals having wills in London and 93% having wills in the South East. Usage of prenuptials is also similar, running at 5% and 4% for London and the South East, respectively.
North East and Yorkshire – setting the pace nationally
Those in the North East and Yorkshire are particularly sensitive to the burdens that come with having wealth, with nearly 44% of the wealthy saying that inheritance places an “unnecessary burden” on the next generation. A significant factor in this is their relatively high awareness of the family conflicts that tend to come with family wealth.
By a number of measures, the North East and Yorkshire are setting the pace for the rest of the country when it comes to succession. With nearly two thirds (64%) seeing the importance of succession planning, they are in the top spot for this measure; they are also tied top in prioritising professional advice around inheritance and top in their take-up of wills. Indeed, everyone in our sample of high net worth individuals from the North East and Yorkshire had already drawn up a will.
This proactive approach to succession perhaps partly explains the high level of faith that the wealthy from the North East and Yorkshire have in their children/stepchildren to protect their inheritance.
Midlands – dealing with serious trust issues
Our research displays quite stark trust issues between the parents and the next generation in the Midlands. Asked whether they trust their children/stepchildren to protect their inheritance, about half were either ambivalent or said they did not trust them. This is higher than the UK average of 41% and significantly higher than the global average of 34%.
Exploring the associated area of family conflict, we also found comparatively high levels of problems associated with wealth. Indeed, the Midlands are on par with London with 41% experiencing such conflict.
Given these dynamics, it is concerning to see that the uptake of wills in the Midlands lags the national average. As this report has identified, failing to plan properly for the passing of wealth is itself a key contributor to family conflict, and may add to these problems.
North West – average, except when it comes to prenuptials
The regional findings in the North West are very similar in many respects to the national findings. Indeed, those from the North West might be seen as being a typical slice of the UK wealthy population.
They put a little more emphasis on succession planning than the average wealthy person in the UK, but they do not necessarily translate this into the appropriate actions. Just 90% of them have wills, against a national average of 93%.
Interestingly, whilst they may be slow with completing their wills, their usage of prenuptials is amongst the highest in the country. Around 8% of wealthy individuals from the North West have used prenuptials against a national average of 5%, reflecting a view amongst 24% of the region’s wealthy that prenuptials are “very important.”
South West – fair warning to the next generation
The next generation in the South West has the most to worry about when it comes to securing inheritances from today’s wealthy. In this region, we found that 10% of the wealthy did not believe that assets should be passed on to the next generation. This was higher than any other region and higher than the UK average of 6%.
Amongst those who are planning to pass on wealth to their children, we also found sizeable numbers (17%) who intended to favour particular children in the allocation rather than simply dividing the assets equally amongst their children.
Taken together, these results tell the next generation in the South West that they should not be taking expected inheritances for granted. If they do, they may be unpleasantly surprised.
Scotland – serious about succession planning
Across all the regions, we found that it was the Scots who were the most concerned with planning for succession and leaving something behind. Our research found that 72% of the wealthy in Scotland believe it is important to leave a financial legacy when they die, against a UK average of 66%. Additionally, 64% of the wealthy in Scotland said that succession planning was important (UK average: 57%).
The Scots are also shown to be fervent believers in dividing their wealth equally between all their children and passing their wealth on to the next generation. Just 2% of the Scots said they did not believe any assets should be passed on to the next generation.
We see fairly good follow-through on these good intentions when it comes to succession, with 92% of the Scots having wills, only slightly less than the national average of 93%.