Helping families have conversations about their finances
Our aim is to change lives by improving people’s financial wellbeing. Dealing with estates can be stressful, and equally having those conversations in advance can be upsetting and difficult.
We hope the launch of our second Family and Finances report will help more families start talking about the importance of money and savings, and how they can plan for their future.
Tackling the taboo
“Not knowing about family finances can cause sleepless nights, and this is where we truly believe that tackling the taboo of talking to your family about money is a key factor for mental wellbeing. Often, these conversations happen too late, or not at all.
As well as easing the distress by having these discussions as early as possible, you may even discover the benefits of passing on wealth during your lifetime – a consideration that often gets completely overlooked.
We believe more needs to be done to encourage stronger engagement with long-term financial planning, as well as promoting family money discussions.
I hope our Family and Finances report highlights some of the reasons why wealth planning and discussions are important, and gives some food for thought on potential solutions."
Ben Waterhouse
Chief Client Officer
Key findings for age 35 - 59
27% have no idea what their parents’ plans are for passing on their wealth.
40% have some awareness, but don’t know all the details.
32% don’t even know who the executor of their parents’ will is.
44% are worried about managing their parents’ finances when they’re no longer able to do so.
31% don’t have a will and have no plans to make one.
A notable trend is the lack of awareness of details about parents’ finances. But what is more surprising, is the high proportion that are worried, overwhelmed and afraid about dealing with parent finances. Just by knowing some details of financial plans or situation could help to reduce anxieties – often the unknown is more overwhelming.
Considering half of respondents aged 35 to 59 are overwhelmed about their parents’ finances, it is notable that almost one-third (31%) have no will and no plans to put one in place. The anxiety about managing their parents’ financial assets clearly hasn’t translated into them thinking about getting their own in order.
Insightful content
What do you want to happen to your estate?
Personal Wealth Adviser, Chris Fenner, helps his clients understand more about inheritance tax visually, through drawing charts. Clients may have two beneficiaries, for example, but what they may not realise is that without plans in place to pass on their wealth, they could have a third as HMRC could take a percentage of their estate as Inheritance tax (IHT).
A guide to inheritance tax rules and exemptions
Our Family and Finances Report reveals a widespread lack of knowledge of inheritance tax, that only a minority of older parents discuss later life planning with their offspring and that 53 percent of younger parents have not even thought about their inheritance plans. This article explains how to aim to make inheritance tax rules and exemptions work for you and your family.
Are you giving your property away for free?
You may not feel as though the conversation around passing on your wealth affects you, but what about your son or daughter or those closest to you? Hear how Personal Wealth Adviser, Craig Rees, advises his clients to be mindful of not only their future, but the future of their family – understand why planting the seed early around intergenerational wealth could be useful for the future.
Tax treatment depends on individual circumstances and may be subject to change in the future.
Key findings for ages 60+
65% plan to pass on their wealth after their death, with only 17% choosing to do so during their lifetime.
19% don’t have a will in place; for those that do have a will, 16% have not spoken to their children about their wishes when they pass away.
82% have little or no understanding of inheritance tax.
19% have never spoken to their children about financial matters of any kind
71% don’t have a Lasting Power of Attorney in place.
By virtue of this age group being very close to, or already in, retirement, there could be the expectation that the majority will have their finances in order. However, our research shows that one-fifth (19%) still do not have a will in place, the vast majority (82%) have no or little understanding of inheritance tax, and 71% don’t have a Lasting Power of Attorney (a person who can manage your financial affairs on your behalf should you become unable to do so).
The results of our research for this age group also show some reluctance to discuss money matters with family members. One-fifth (19%) have never spoken to their children about finances at all. Whilst this is for a number of different reasons, the result is the same – a lack of understating about parents’ wishes for their financial assets, and this could result in confusion and anxiety for children and grandchildren.