Britain’s wealth gap will be passed down the generations as well-off older people bequeath property to their already thriving offspring, according to new research from one of the UK’s leading thinktanks.

The Institute for Fiscal Studies (IFS) found that today’s young people were likely to inherit more wealth than their predecessors but the benefits would be skewed to those who were already well off.

The study concluded that inequality was likely to increase and social mobility hindered as pensioners bequeathed the wealth they had accumulated as a result of rising home ownership and property-price inflation.

“Between 2002-03 and 2012-13, the wealth of elderly households (those in which all members are 80 or older) increased by 45%, mostly as a result of higher homeownership and rising house prices,” the IFS study said. It added that 72% of those households now expected to leave an inheritance, up from 60% a decade earlier, with a sharp increase in the proportion expecting to leave a large inheritance.

Property wealth has increased and become more widely spread in recent generations. Owner-occupation rose from 30% at the end of the second world war to a peak of 70% at the turn of the millennium, while property booms in the 1970s, 1980s and 2000s have seen house prices rise by almost 300% in real terms in the half-century ending in 2010.

As a result of these trends, the IFS said younger generations looked much more likely to inherit than their predecessors. Someone born in the 1930s had a 40% chance of an inheritance, rising to 61% of those born in the 1950s and 75% of those born in the 1970s.

But the thinktank warned that future inheritances were set to be highly unequal given that the richest half of elderly households held 90% of the wealth and the richest 10% held 40% of the wealth. “Hence a ‘lucky half’ of younger generations look likely to get the vast majority of inherited wealth.”

The largest inheritances would in the main go to those who were already well off. More than half of those likely to secure an inheritance of at least £250,000 had incomes in the top 20% of the population.

Andrew Hood, a senior research economist at the IFS, said: “The wealth of younger generations looks set to depend more on who their parents are than was the case for older generations. Today’s elderly have much more wealth to leave to their children than their predecessors did.

“At the same time, today’s young adults will find it harder to accumulate wealth of their own than previous generations did, due to the sharp fall in homeownership for that group, the dramatic decline of defined benefit pensions in the private sector and the stagnation in their incomes.”

