A lucky generation of Australians are set to inherit a ton of cash in the years to come, and it’s not just the super rich who will benefit.

Young Australians are expected to inherit $ 224 billion annually through 2050, as baby boomers pass on the money earned in the booming real estate market as well as equity investments.

A new report has revealed that Gen X and older millennials can expect to inherit $ 3.5 trillion in the years to come, and the money won’t be limited to the very rich, even the most Aussie. poor should receive a windfall.

In fact, inheritances and donations are expected to exceed $ 237 billion by 2050.

Wealth transfers are also increasing with more than $ 120 billion transferred in 2018, more than double the 2002 level and more than the federal government spent on health during the fiscal year, the Commission found. the productivity.

During this 16-year period, a total of $ 1.5 trillion has been inherited by Australians since 2002.

Inheritances in particular, which account for around 90 percent of all transfers, have grown steadily alongside the growing wealth of older Australians.

In 2018-2019, the average value of the inheritance was $ 125,000 compared to $ 8,000 for donations.

But the Productivity Commission has forecasted a four-fold increase in the value of inheritances over the next 30 years, based on the booming housing market, smart investments and fewer children to leave behind. ‘money.

But surprisingly, inheritances actually help reduce wealth inequalities in Australia.

“The wealthiest people receive more heirlooms and gifts on a dollar-for-dollar basis, but less as a percentage of their existing wealth,” said Productivity Commissioner Catherine de Fontenay.

“Compared to the amount of wealth they already have, those with less wealth benefit on average from a much larger inheritance, about 50 times larger for the poorest 20% than the richest 20%. .

“As a result, wealth transfers tend to reduce the share of wealth held by the richest Australians and our projections show that this is likely to continue. This might come as a surprise to some, but it was found in all of the other countries that were studied. “

While the poorest Australians have on average only $ 7,500 in assets, they receive around $ 30,000 from their parents, which usually consists of a retirement pension and a car or truck, according to the report.

Each generation has been richer on average than the previous at the same age, although baby boomers have been particularly successful, he added.

Children tend to enjoy a situation of relative wealth similar to that of their parents, but inheritances are not the primary driver.

“Inherited wealth contributes only modestly to the persistence of intergenerational wealth. About a third of this observed persistence is due to inherited wealth. The rest comes from all the other things parents give their children – education, networks, values ​​and other opportunities, ”said Productivity Commissioner Lisa Gropp.

“By the time people receive inheritances, they will generally have reached middle age – around 50 on average. This limits the impact of inheritances on opening up life choices and career and family opportunities. On the other hand, giveaways tend to be much smaller and go to younger people who are just starting out in life.

The wealthier parents could have invested more in their children’s education by sending them to a private school or a better public school, ”the report adds.

“They may have instilled their attitudes and values ​​that promote wealth accumulation. And to the extent that there is a genetic predisposition to accumulating wealth, their children may have inherited it, ”he said.

Previous research has found that there are around 7.5 million baby boomers and if 70% of that wealth is transferred, the average Australian could be passed on to a whopping $ 320,000. .

The study found that nearly two in three Australians aged 60 and over plan to leave a legacy for their children, with 57% wanting to leave everything to them.

During this time, 19% will only pass on the family home and 13% will give their savings to their children.

Money expert Vanessa Stoykov, who commissioned the research, said the data showed people were making ends meet right now, but were relying on their parents’ money inheritance to keep them alive. offer a better future.