MAPS has defined the inherited wealth sector as covering those individuals aged under 65 whose main source of wealth is via the inheritance of property andor financial assets. Since home ownership has increased substantially in the last thirty years, this has meant that many more people are set to inherit larger estates, usually from parents or other relatives of the parents' generation.

A sub-sector within the inherited wealth market is that of High Net Worth (HNW) individuals who are defined as those with liquid assets of £50,000 or more (but excluding the richest 500 individuals). This group includes inheritors who make up 21 percent of this total, or 381,000 individuals. This has implications for a range of financial service providers with intense competition to take a share of this wealth in the form of investment in their products.

The gradual reduction in Inheritance Tax (IHT) in recent years, with a flat rate of 40 percent in 1997, combined with the threshold before inheritance tax is levied being raised progressively, has meant that fewer people now have to pay any inheritance tax at all. This means that those inheriting a substantial estate are able to spend or invest a larger proportion of what they receive.

Personal wealth in the UK continues to be biased towards a minority of individuals. After a period of strong growth in personal wealth between 1984 and 1989 of over 200 percent, the market reacted sharply to the recession, falling by 8 percent in 1990. In 1993 growth started to accelerate again, a pattern that is likely to have continued up to 1997.

Both marriages and births are set to decline by the year 2000, with marriages down by just under 1 percent to 338,000 whilst births will decline by 3 percent to 719,000. The death rate will remain broadly the same at 650,000 a year in 2000. These factors will lead to individuals inheriting more per capita whilst the total pool of inherited wealth may not change significantly. With fewer marriages and a trend to smaller families, individuals are more likely to spend any disposable income on themselves rather than save it and in those cases where there are no children to bequeath money or property to, inheritances may shift towards charities or other organisations.

Life expectancy in the UK is approaching 80 years old, and this increasing longevity is a two-edged sword for the inherited wealth market. On one hand people are living and often working for longer and thus should, in theory, accrue greater wealth. On the other hand, as a growing proportion of the population reaches retirement age and the working population shrinks in relative terms, the state will be less able to support pensioners both in terms of an adequate state pension and in terms of health care requirements.

The cutting back of services to the elderly who have some savings is having a significant effect on estates. A reduction in geriatric beds means that those who are able to pay are often required to deposit a lump sum payment. This is resulting in an increasing number of pensioners having to sell their homes, thus reducing the value of their estates.

With average house prices and transactions on the increase after a long period of sluggishness in the housing market during the recession of the early 1990s, the value of people's property as part of their estate will once again start to rise. It will also remove many more mortgage holders out of the negative equity trap. However, it is unlikely that a housing boom on the scale of that witnessed in the early 1980s will be repeated.

The total number of inheritances has risen by just under 60 percent between 1986 and 1990 to 410,00 inheritances, whilst in value terms it has increased by 95 percent to £7.8 billion. The value of other inheritances, notably, did not rise as rapidly with growth of only 12 percent. Over a half of inheritances were from parents, and a large proportion also from relatives of the parent's generation.

In the period 1989-90, buildings accounted for 45 percent of the total value of assets bequeathed to family or other parties. The total value of this share is just over £5 billion, or 167,000 properties. The number of properties left as part of an individual's estate has risen by 40 percent since 1986, with their value rising faster at a rate of over 200 percent between 1986 and 1990 (the peak of the housing market). The average value of a bequeathed property rose from around £45,000 in 1986 to just under £70,000 in 1990.

Substantial inheritance windfalls will inevitably build up over the next thirty years as more and more people inherit property, mainly from parents. The 'Right to Buy' scheme of the 1980s, whereby council tenants could purchase their council houses has also created a further tier of homeowners amongst a socio-economic group that in the past would have had minimal assets to pass on to future generations.

There will be a projected increase of 66 percent in the number of homes in inheritance between 1990-96 and 2026-30, which will inevitably increase the overall value of inherited wealth, despite the dramatic fall in house prices in the early 1990s.

A trend to smaller families will mean that inherited wealth will increasingly be concentrated amongst fewer individuals, who themselves will have a larger inheritance to save or invest and so will be attractive to the major financial service providers who will be competing for their business. For those couples who remain childless, a significant minority at around 10 percent of estates left on the second death will not be left to direct descendants.

The birth rate is projected to decline from around 800,000 per annum in the 1990s, to around 760,000 per annum by 2001. Whilst in 1990 there were 768,000 18 year olds in the population, this figure had fallen to 668,000 in 1996. This means that there are fewer people coming into child bearing years, indicating that by the middle of the 21^st century the total population in the UK will actually start to decline, having longer term implications for the inherited wealth market.

As people live longer, the inevitable consequence is that they will have progressively less accumulated wealth to pass on in their estates. With pressure on state provision for pensions and care of the elderly and sick, those who can afford to pay for services will increasingly have to do so, therefore the longer someone lives the more they are likely to use up their savings paying for their own care.

Inheritance of housing wealth is projected to increase by 54 percent in value terms to £8.6 billion by 2011, whilst inheritance of other assets is set to rise by 24 percent to £7.7 billion, representing an overall increase of 38 percent by 2011.

Inheritances of house property are forecast to rise by 48 percent by 2011 to 310,000, whilst inheritance of other assets is set to rise by 26 percent to 490,000

MAPS' exclusive consumer research has shown that the most popular option for those receiving a substantial inheritance is to either buy a house or flat or to invest in TESSAS, PEPS, equity plans or shares, with 16 percent of respondents mentioning these options. Other popular choices include paying off a mortgage or helping others to buy a home.