Financial plans are a key part of retirement and later life but recent research has revealed Brits over 60 are failing to create them.
Schroders Personal Wealth (SPW) surveyed 1,000 Brits over 60 and found have never had discussions about financial provisions with their children when it comes to passing down their estate, with an overwhelming majority (78%) having no plans whatsoever.
This is despite the fact that 72% intend to pass their wealth to their children after they die, and 13% aiming to do so during their lifetime.
Similarly, 53% wants to give part of their estate to their grandchildren after death and 12% during their lifetime.
‘Uncomfortable’ conversations
SPW said its study shows the “seeming reluctance to discuss estate planning and the passing on of wealth with children”.
Around 65% of respondents admitted to rarely or never discussing inheritance with their offspring and, of the fifth that do have an estate plans, less than half (48%) claimed their children know the plan in place.
Some 32% said they don’t believe it’s their children’s business to know about their finances, while 13% admitted to feeling uncomfortable talking about money with their children.
Turning the tables
But when SPW turned the spotlight on children – surveying 1,000 people aged 30-59 with at least one parent alive – many are concerned about having to deal with their parent’s finances.
The majority of respondents (41%) said they were worried about feeling overwhelmed, while others said:
- They are afraid of doing something wrong (32%);
- They are worried about disagreeing with their siblings (22%);
- They are concerned their decisions may lead to losses (20%);
- They are not knowledgeable enough about finances and wouldn’t know where to start (18%); and,
- They don’t feel they have enough support (14%).
Promisingly, however, 61% said they would turn to a financial adviser to help manage their parent’s finances.
‘More needs to be done’
Mark Duckworth, chief executive of Schroders Personal Wealth, said: “Family conversations around managing wealth in old age and passing it on to the next generation have never been so important.
“Over £5.5trn ($7.6trn, €6.3trn) will move hands between generations in the UK between now and 2055, peaking in 2035.
“Having a plan in place on how to handle this efficiently is crucial to pass wealth on smoothly, avoid family disputes and manage the tax bill.
“But our research in this report shows the difficulties many families have when it comes to talking about money.
“More needs to be done to encourage stronger engagement with long term financial planning. We believe that with some guidance and a plan in place, families can overcome the feelings of worry and start having the conversations they need to have to plan for their future.”
