Warning to Gen Z over seriously 'risky' money mistake many are making

If you've been assuming you'll inherit enough money to make retirement a little easier, experts have warned that it might be time to rethink that plan.

According to new research from Standard Life has revealed that almost one in four Gen Z adults, those born between the years 1997 and 2012, are factoring inheritance into their retirement plans, despite warnings that the money or property they're expecting may never arrive.

The study found that 23 per cent of Gen Z admit they aren't prioritising saving for retirement because they expect to receive an inheritance from family members.

And Millennials, born between 1981 and 1996, aren't too far behind, with one in five saying the same (20 per cent).

But that financial safety net could be a whole lot smaller than many people expect.

Gen Z have been issued an alarming warning over one particularly 'risky' money move (Getty Stock Images)

According to the research, one in seven parents (15 per cent) now plan to spend more of their money during retirement instead of preserving it to pass on to their children.

The findings highlight a growing gap between younger generations facing rising housing costs and day-to-day expenses, and parents who are increasingly focused on enjoying the savings they've worked hard for.

Upcoming inheritance tax changes are also shaping retirement decisions as, from April 2027, most unspent pension funds and pension death benefits will be included in the value of an estate for inheritance tax purposes.

One in seven parents reportedly plan to spend more of their money during retirement instead of preserving it to pass on to their children (Getty Stock Images)

As a result, almost three in 10 parents (29 per cent) said the reforms would influence how they use their pension savings.

Around one in 10 (10 per cent) said they would be more likely to spend their pension during retirement rather than leave it untouched, while 22 percent said they would be more inclined to gift money while they're still alive.

Mike Ambery, retirement savings director at Standard Life, warned younger people against relying on inheritance as part of their long-term financial plans.

Gen Z's financial safety net could be a whole lot smaller than many people expect (Getty Stock Images)

He said: "Inheritance can play an important role in family finances, but it is risky for younger people to build their retirement plans around money or property they may never receive.

"At a time when many are dealing with higher living costs and financial pressures, it's understandable that some may look to inheritance as part of the picture - but it's far from guaranteed.'

The director continued: "With people living longer and later-life costs rising, many parents may understandably want or need to use more of their savings during retirement.

"With this in mind, inheritance should be seen as a possible bonus, rather than a substitute for building your own retirement pot."