Research carried out by Barclays Wealth has found that nearly a third of millennials would prefer that their parents spend money on their retirement rather than saving it to pass down by way of inheritance.
The study found that 32% of older millennials would rather that cash was spent on a comfortable life in retirement than being left to them in their parents’ Wills.
The study questioned 4,000 40-year-olds and their parents. It found that 99% of the parents intended to pass on money to their children and grandchildren. Some 37% had given money during the current year to help their children out with rising living costs.
When speaking to the children however, researchers found that 32% would prefer that parents held on to their money and used it themselves to ensure a comfortable retirement.
The need for parental wealth
The assets amassed by millennials’ parents over the years may be needed to fund a range of needs of both parents and children.
With pension funds volatile, parents may need savings to supplement pension income during retirement. They may also have concerns about funding care, if this is necessary, in later years. The survey found that 36% of the parents questioned were worried about paying for care costs. Nearly one-fifth (19%) were considering downsizing their homes and 31% were worried about supporting their own living costs.
Children may be struggling with living costs as well as finding it difficult to step onto the property ladder without parental help.
Planning for the future
Whatever your situation is, planning for the future is essential. Leaving the right Will not only ensures that your assets will be passed on in the way that you want, it also gives you the opportunity to structure your estate in the most efficient way possible. A Will is also the best way of avoiding potential disputes among family members in the future. If they are aware of exactly what your wishes are, there is far less scope for disagreement.
Clare Francis, Director of Savings and Investments at Barclays Wealth, said: “Many people want to do what they can to ensure they maximise the amount they leave to their family and minimise inheritance tax, but working out how much you can afford to give away during your lifetime isn’t easy. With finances being stretched in all directions, it can be incredibly stressful if you want to support your children in the short-term, while making sure you don’t find yourself struggling further down the line.
“Even though most children would be very grateful if their parents are able to pass on some inheritance while they’re still alive, they wouldn’t want them to have money worries in the future as a result. This is why it’s not only important to plan, but also to include your family in any conversations – it can make such a difference and help remove some of the pressure many parents feel when thinking about how and when they’ll pass on their wealth.”
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