Nearly a quarter (24 per cent) of Gen Z savers are not prioritising saving for retirement and are instead expecting an inheritance to fund their later life, research from Standard Life has revealed.

The survey found that a large proportion of younger people are deferring retirement saving in the hope that an inheritance will plug the gap, with a similar proportion (23 per cent) of Millennials also sharing this view.

However, Standard Life warned that this could prove to be a "risky bet", pointing out that various factors, such as people living longer, increasing care needs, and rising living costs, mean estates may be more stretched than younger generations anticipate.

In addition to this, it said that the government's planned 2027 changes to inheritance tax, which will bring unspent pension pots into scope, could also reduce what’s passed on.

Indeed, separate research from Just Group found that bequeathing cash to loved ones after death is not a key retirement objective for most people aged 60 and over.

Instead, the top retirement objective for this group was to spend more time with friends and family, chosen by nearly half (46 per cent, followed by travelling abroad (37 per cent) and travelling in the UK (36 per cent)

One in five (20 per cent) of this cohort chose leaving an inheritance as one of their top five goals for retirement, although a significant minority chose helping children and grandchildren with their finances (18 per cent), sometimes called a ‘living inheritance’.

“Inheritance and estate taxes are hot topics, but the research suggests that leaving money is not high on the retirement agenda of most Baby Boomers," Just Group group communications director, Stephen Lowe.

"Overall, the priority of most seems to be to kick back and relax by spending time with friends and family or pursuing travel and hobbies, over other options such as working part-time or volunteering, setting up their own business or studying.

"The reality is that most Boomers are going to need to be careful with their cash and probably feel leaving money is a hope and not an expectation.”

And whilst Standard Life managing director for retail direct, Dean Butler, said it’s understandable that younger people may not see retirement as an immediate priority, he argued that it makes sense for savers to start planning for their retirement sooner rather than later.

"Many may be banking on future financial support and while it’s true that Millennials and Gen Z are set to benefit from a significant wealth transfer from Baby Boomers over the coming years, inheritance is rarely guaranteed and it could come later in life, or not be as much as expected," he stated.

“With so many variables, from care costs to potential tax changes, it makes sense to plan and build your own retirement savings, even if you hope to receive a boost later.

"Fortunately, there are straightforward and flexible ways to start building a retirement pot over time.

"By starting early and contributing little and often, people can take advantage of tax efficiency, employer contributions and potential compound investment growth, and help improve their financial security in later life.”

---