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What does the chart show?
It shows UK median household wealth over the past decade, broken down by age group. Baby boomers — or at least those aged over 65 — is the group to have experienced the greatest increase in their household wealth during that period, with a rise of 96 per cent.

Netwealth, a wealth manager, analysed the Office for National Statistics’ Wealth and Assets surveys between 2006 and 2016 (the most recent data available). In 2006, those aged over 65 owned 28 per cent of the UK’s household wealth, a figure which had increased to 36 per cent 10 years later.

The analysis also found that one in five (20 per cent) of over-65s in the UK to be a millionaire, compared with 7 per cent in 2006.

Why are older people getting richer?
Often known as the wealthiest generation, baby boomers have consolidated their position through “soaring property prices, inheritance and the prevalence of final salary pension schemes”, according to Charlotte Ransom, chief executive and founder of Netwealth.

Evangelos Assimakos, investment director at Rathbones in Edinburgh, described the 2006-16 period as coinciding with the “peaks and troughs of interest rates for the UK”. In the wake of the financial crisis, central banks cutting interest rates and providing financial stimulus in the form of quantitative easing led to a “huge inflation of financial assets”. Households owning assets including properties and share portfolios “did really well” compared to those who did not.

What about the wealth of other generations?
Younger households have seen their proportion of the UK’s household wealth fall over the same period. Generation X, defined as those aged between 35 and 44, suffered a 5 percentage point fall, while millennials, defined as those aged 25 to 34, experienced a 2 percentage point fall.

Although total UK wealth has increased by an average of 51 per cent over the 10-year period, individuals aged between 25 and 54 have seen their wealth increase by 9 per cent — one-tenth of the increase enjoyed by those aged over 65.

The wealth disparity has given rise to Bomad — the bank of mum and dad — with one recent survey estimating that parents helping with property deposits are behind up to one in four transactions in the UK.

How should baby boomers best plan to transfer their wealth?
Research by the Kings Court Trust and Centre for Economics and Business Research estimates that intergenerational financial transfers worth £5.5tn will occur in the UK over the next 30 years.

Experts advise that any parent or grandparent preparing to help a child with a property deposit will have to consider whether the money is a gift or a loan and, if so, how and when they expect it to be repaid.

This will also affect how any cash transfer will be treated for inheritance tax purposes (IHT). For large amounts of money — such as gifting property deposits to children — the “seven-year rule” will apply, meaning the person who made the gift has to survive for seven years for its value to fall outside the final estate for IHT purposes.

Other tax efficient ways of transferring money to the next generation include setting up trusts — although doing so has become more complicated and expensive in recent years, and advisory fees must be factored in.

Some popular alternatives are starting a pension for your children or grandchildren, or saving into tax-free savings accounts such as the Junior Isa or Lifetime Isa.

Whichever route parents choose, Mr Assimakos added: “Younger generations could use all the help they can get.”

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