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Stick or twist?
30 November 2022
3 minute read
There is divided opinion about when inheritance should be passed down to the next generation.
For most parents, passing on wealth as inheritance is planned - yet there’s divided opinion about when that money should be passed down to the next generation.
Parents are keen to hand over money to help grown-up children in the here and now – rather than much later in life receiving this money as inheritance – new research from Barclays Wealth Management has shown1.
Everyone surveyed said they intend on passing an inheritance onto their children, with almost two in five (37%) anticipating gifting more money this year to help their children with the rising cost of living. The study showed that the money is intended to help their children more with immediate living costs, as opposed to bigger purchases like property.
However, the oldest of the millennial generation would prefer their parents to use their cash to fund their own, comfortable retirement, rather than receive it as an inheritance.
A third (32%) of adult children would rather their parents kept it all to themselves.
So how do you decide what’s best? Here we weigh up the pros and cons of giving now and giving later.
Working out how much you can afford to give away during your lifetime isn’t easy with finances being stretched in all directions.
Getting professional help can help with some of the difficult decisions to making sure you can help loved ones and won’t find yourself struggling further down the line.
Whatever route you choose, juggling financial priorities makes communication and forward planning even more vital, but this does not always happen.
Two in five (38%) of parents in our study admit to not speaking to their children about their inheritance plans.
Clare Francis, Director of Savings and Investments at Barclays Wealth Management, said: “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.”
Speak to your Wealth Manager or contact us if you would like to arrange a meeting with a Wealth Planner to discuss your options.
Your Wealth Planner can help you understand the effect of tax on your wealth and offer tax-efficient wrappers for your investments. They’ll be able to guide you towards making the right decision for your financial planning needs. Your planner can't offer tax advice – you should seek that independently. Please bear in mind that tax rules can change in future and their effects on you will depend on your individual circumstances.
This article does not constitute personal financial, tax or legal advice. Each person’s circumstances are different so if you are unsure about investing, you should speak to your Wealth Manager.
The value of investments can fall as well as rise. You may get back less than you originally invested.
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