How many families talk about money before a serious health concern arises or an immediate member suddenly passes away? It’s all too easy to avoid discussing something that makes us feel uncomfortable, yet regular family finance meetings may in actual fact do more good than bad. They may, for example, leave less unpleasant surprises when it comes to finding out one’s inheritance.
According to wealth management firm Charles Stanley, a survey has shown that one in seven young adults expect to inherit money before they are 35. Given the typical age is between 55 and 64, we have a generation unknowingly facing disappointment. Furthermore, the same group surveyed believed they were set to receive almost £130,000 – almost twelve times the average amount of £11,000.
Had our millennials been born in the 1940s–1960s, like their parents, they would most probably have found saving for their future a significantly more attainable goal. In a report, the Financial Conduct Authority (FCA) said job uncertainty, higher student debt and rising house prices are presenting millennials with very real challenges in terms of safeguarding their financial future. In an age where solid saving is nigh on impossible for many young working professionals, even those with very little or no student debt, building up a sizeable house deposit – whilst paying rent – is financially demanding. Adding the possible pension contributions and the investment schemes eliciting them to look ahead to 30–40 years from now, there is conceivable pressure to plan ahead regardless of whether it is an achievable reality. Is it therefore any wonder that parents become the financial lean-to?
With baby boomer parents building housing equity and benefitting from their personal pensions, a common complacency and deep dependency may have left many young adults not unduly concerned about securing the deposit for their first home – the inheritance will cover that. But with an ever-ageing population and the associated potential health concerns, for some parents, savings priorities are shifting from inheritance to funding later-life care.
Sitting down together as families and discussing financial responsibility will encourage our adult children to make better decisions in their future. Talking over real rather than estimated inheritance offers parents an opportunity to teach their children not to depend on a self-calculated legacy to set them up for life. Yes, there will be help, but help does not mean life security. And don’t bank on it coming when you hoped either.
This also brings home the very real need to write a will. A Macmillan Cancer Support survey in January 2018 reports that an astonishing 42% of adults don’t have a will. The consequence of “will apathy” is family not being protected in the event of a member becoming incapacitated or dying unexpectedly. Dying without a will leaves the door open for potential legal problems not to mention family fallouts over the distribution of assets.
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