Britain faces many pressing financial challenges. One of the worst is the parlous position of those aged under 30, known as Gen Z.

For the first time, a generation will be significantly poorer than the one before.

This is well known, but the fact that the most watched TED talk of 2024 was called how the US is destroying young people's future perhaps underlines how this debate is shifting gear. 

New York University marketing professor Scott Galloway delivers a stinging rebuke that will resonate with young people, and his appraisal is as relevant to the UK as the US.

The problem faced by a typical twenty-something is daunting: how to buy a house and pay down debt while also building an emergency fund and future savings.

The figures are sobering. First-time buyers in England put down an average £55,372 to secure a home, a daunting amount to save - and especially when the average UK salary for those aged 22 to 29 is £32,292.

A red-hot rental market makes the challenge harder. Rents have surged by about 28 per cent in four years, taking the average monthly cost to £1,330, says the Office for National Statistics.

Buying your first home has always been hard. But never this hard. 

When I stepped on to the property ladder in 2001, buying a one-bed flat aged 28, the average house price was 3.6 times the average salary. 

Today the ratio is 6.1, according to Nationwide Building Society (see chart below).

And student debt is also very different. My £9,000 of maintenance loans seems trifling by modern standards. 

Today's students can easily face debts of £50,000 on graduation day. They then face a 9 per cent wage slice for repayment of the loans for those fees and living costs. Little, if anything, is left over to save.

The Resolution Foundation think tank underlined this grim situation in an 'Intergenerational Audit' last month. 

It found that the proportion of under-35s living with their parents had risen from 26 per cent in 2000 to 39 per cent by 2022. 

It blamed the 'costly housing, repeated economic shocks and stagnating living standards' that have defined our 21st century financial lives.

The figures are likely to have worsened in recent years with house prices continuing their relentless climb.

What can stop, stall or even reverse this trend of generational impoverishment?

Perhaps Labour will make good on its housebuilding pledges, easing property price pressure. Perhaps the limited levers within tax and benefits policy will swing towards the young. Given the history of successive governments in these areas, neither looks certain.

So, what could be a meaningful solution? Perhaps the obvious answer is that the generation that has more could give to the generation that has less.

There is a mechanism for this: death. The number of adults receiving an inheritance over a two-year period rose from 1.7 million in 2008-10 to 2.1 million in 2018-20.

These two gifting rules are key 

But you can, of course, pre-empt death by giving wealth away whilst alive, and be able to appreciate your own acts of generosity.

In the tax world, this is known as 'gifting'. It's worth familiarising yourself with all the gifting rules but I would say two of the most important are:

1. That you can give away £3,000 each year free of inheritance tax. This can be carried forward for one year, offering the opportunity to give away £6,000 if you missed a year.

2. You can give away as much as you like, and if you live for seven years it won't be liable for IHT. You also pay less than the full 40 per cent rate if you die between three and seven years after the gift - it tapers down.

But there has been little incentive to gift. In fact, there has been a very good reason to hold on to your money and use your pension scheme as a tool in estate planning. Pensions have been exempt from IHT. 

If you die under 75, a pension pot is passed on entirely tax-free. A death after age 75 means beneficiaries escape IHT on the pot but must pay income tax on withdrawals from it.

But significant change is coming. The pensions exemption will be removed in April 2027, it was announced in October's Autumn Budget, and this will upend many areas of financial planning. It could also spark an unprecedented giveaway.

As a reminder of the basic inheritance tax rules, you can leave up to £325,000 tax-free when you die, with an additional £175,000 allowance if you leave your home to your children or grandchildren. 

Married couples with direct descendants can potentially leave up to £1m tax-free as they can transfer unused allowances. The tax rate on any remaining liability is 40 per cent.

With such high limits, fewer than five per cent of estates are liable. But that is changing. 

The proportion of liable estates was expected to rise rapidly anyway, and the inherited pensions change will only accelerate the trend. (The chart below shows the official forecast BEFORE the pension change).

This is because mainstream asset prices, such as those for property and stock markets, have marched higher so that today the £1m threshold looks far less generous than it did when it was set, back in 2017.

Consider a married couple with a £500,000 house and who have each accrued £300,000 in their pensions and tucked away a combined £100,000 in Isas. Prior to the Autumn Budget, they would have comfortably avoided IHT, because their pension pots would have been ignored. 

Under the new system, there would be a potential liability of 40 per cent on the £200,000 portion above the £1m combined allowances.

It is, of course, impossible to know how much your pensions and Isas will dwindle as they are used to fund your retirement. You can't predict the timing of your death.

But there is also much you can plan for within estate planning options. Trusts, legal structures that can shield assets from inheritance tax, are likely to become far more popular. 

Estate planning is complex and one of those areas where specialist support is highly advisable.

The power of gifting

More than anything, the attractions of giving your money away or spending it will grow from 2027.

Gifting was already on the rise. The value of gifts of more than £10,000 rose from £13.1billion in the two years prior to 2008-10 to £29billion in the two years prior to 2018-20, according to the Resolution Foundation.

Those gifting amounts may look paltry compared to the amounts that may be handed down in 2030 or by 2035.

Faced with the twin pressures of a future tax headache and a son or daughter in need of a mortgage deposit today, it will make more sense to gift.

It could even drive a surge in 50 and 60-somethings downsizing, as they attempt to make their wealth more liquid. 

This, in turn, could help ease pressure on the property market. In combination, it could ease the inter-generational wealth gap.

Parents want to help. The 2024 Fidelity Global Sentiment Survey showed most British people want to help their descendants - 61 per cent made it a priority to 'help my children/grandchildren with their future financial situation'. 

Yet only 25 per cent were confident that they could. It was in stark contrast to a global average of 40 per cent. 

There is a growing appetite for more radical thinking. Speaking to senior colleagues and peers in the pensions industry in recent weeks, most are reconsidering their plans. 

Many told me they are giving serious consideration to downsizing, when before it had been a vague notion.

It has a double appeal - freeing large amounts of money that can be passed on to contribute towards first-time deposits. 

But it also has a more self-indulgent appeal: why delay your acts of kindness until after death? Give now, enjoy seeing it used - and also pay far less tax.

Perhaps a bigger downsizing trend will begin from here. And perhaps the most watched TED Talk of 2035 will chart how the Great Wealth Transfer began in 2025.