The Wealth of Families: The Intergenerational Transmission of Wealth in Britain in Comparative Perspective

The distribution of wealth is of major concern for its potential economic, social and political impacts. Wealth transfers between generations give rise to a variety of normative and practical issues with respect to taxation in particular as equity between and within generations looms large in current British debates.

This report contributes to those debates by investigating patterns of wealth transmission across generations and the role this plays in wealth accumulation and the generation of wealth inequality in Britain compared with other rich countries. It is the first study to investigate this in depth in a comparative framework bringing together data from the Wealth and Assets Survey with survey data for France, Germany, Ireland, Italy, Spain and the US. It is based on retrospective data from surveys carried out before the current health and economic crisis due to COVID-19. That crisis will have deep-seated and long-lasting effects on wealth that are extremely difficult to assess at this point, including on inheritances to be received in the future, but that does not diminish the importance of understanding past patterns of intergenerational wealth transmission.

The Wealth and Assets Survey (WAS) is a longitudinal survey covering Great Britain carried out by the Office for National Statistics since 2006, whereas the surveys we employ for other countries are cross-sectional. To cover inheritances received at any time we concentrate on those households in Wave 3 (2010-2012) who were also in Waves 1 and 2, aggregating reported receipts of transfers across these waves. For gifts this covers only receipts in the previous six years.

Many missing values for amounts received as inheritances before Wave 1 had to be imputed, and in order to align with the comparator country surveys before-tax values were estimated from reported after-tax amounts, small transfers were excluded from the British data, the household was used as unit of analysis and marketable not pension wealth was used as the wealth concept.