Research published by the Central Bank today reveals that over one third of households in Ireland have received an inheritance. The accumulated value of these inheritances is estimated to be worth €97 billion.
The findings are published in an Economic Letter from the Central Bank and are based on data from the CSO’s Household Finance and Consumption Survey.
The survey was conducted in the second half of 2020 with a sample of 6,020 households.
The report finds that the number of households in receipt of inheritances has gone up over time.
It finds this to be the case for all age groups. For example, about 14% of households headed by 50-59 year olds reported having received an inheritance in 2013. By 2020, that number had increased to approximately 22%.
It also finds that the value of inherited wealth is worth a bigger share of total wealth for households in middle income brackets than for those in the top income bracket.
This leads the authors to conclude that inherited wealth does not add to income inequality here and may even reduce it. It says this is similar to findings in Britain, the US and Germany.
However, it also finds that wealthier households are more likely to receive inheritances.
The median gross incomes of households that have received an inheritance are 17% higher than those that have not inherited anything. Net wealth, which subtracts out debt, is 155% higher.
Also, those in receipt of an inheritance are 23% more likely to own a home and 13% more likely to own a private business.
The authors suggest this might be evidence of a phenomenon known as “dynastic home equity”. This is when “persistence in home ownership across generations” in the US leads to “a substantial increase in young adults’ housing wealth inequality”.
Money accounted for 57% of inheritances with dwellings accounting for 33% and land 19%.
Land and dwellings accounted for 70% of the cumulative value of inheritances by 2020.
Parents were responsible for 78% of inheritances, the Central Bank added.