Some 21 per cent of over-55s are planning to leave nothing to their children in inheritance, according to Aviva.
Aviva's latest Real Retirement report which questioned over 16,000 consumers aged 55+ found people were more likely to spend the money while they were alive.
Paying for their own living costs and supporting close family was more of a priority than inheritance.
Those aged 55-64 were least likely to leave an inheritance, suggesting the economic situation has undermined peoples' financial security.
Instead of inheritance, 20 per cent said they would give a cash loan to family members and a further 20 per cent would regularly give family money to avoid inheritance tax.
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However, some 53 per cent of those who did plan to leave an inheritance said they would leave more than their parents did. This included property, other land, jewellery and heirlooms.
Many retirees who bought property earlier have benefitted from rising house prices but others have seen their finances and potential inheritance affected by the housing market crash.
Clive Bolton, managing director of Aviva 'at-retirement' business, said: "Although many over-55s are hopeful of leaving an inheritance, the concerns of those on the final approach to retirement suggest they may become less common as they find their finances squeezed in later life.
"For some over-55s the desire to leave an inheritance plays second fiddle to the more urgent financial proprieties', and even those who are financially secure are often tempted to share their wealth during retirement rather than wait to leave an inheritance."

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