Some families in the UK are missing out on a long-running tradition of financial support and potentially leaving their relatives open to financial difficulties by not discussing money management with family members. While independence is a positive trait and topics like inheritance and retirement are difficult to broach, many people still benefit from financial lending and gifting across generations.
A report published by Standard Life titled The Family Financial Tree indicates that 35% of parents and 43% of grandparents would not ask anyone in their family for financial advice. The report suggests that there are five topics that it is important to discuss to allow your family to be a supportive financial network.
If you were having financial trouble, would you go to your family for help? 42% of UK adults would not. Would you help a family member with financial difficulty if they asked? Talk to your family about who can provide financial support in times of need.
Pensioners and Grandparents
Are the oldest generation of the family, retirees and grandparents, able to afford to look after themselves? 67% of UK grandparents would not turn to the family for financial help, in spite of the fact that Age UK reports 1.8 million pensioners in the UK live in poverty. Have a frank financial discussion to make sure the elders are cared for.
Expensive Life Events
There are some events in our lifestyle that require a lot of money at times in our life where we're not in a position to afford it. For example: University education, buying your first home, having children. Is the family in a position to help younger members finance important life events? In the last year 45% of grandparents gave an average of £452 to each grandchild, while 47% gave an average of £1,222 to their adult children.
If the worst should happen and a child's parents die unexpectedly, is there a plan in place to take care of the child? Would you be willing and able to take in the children of a relative if their parents are dead? 61% of parents and step-parents do not have a Last Will and Testament. Make sure your family has thought about the consequences of these grave circumstances.
You should make at least one person aware of where you keep financial paperwork and relevant passwords. 22% of families only discuss this when it's necessary, after a problem has occurred, but you can save your family the headache by having the discussion now and making your finances available to them if something happens to you.
And while you're discussing money with your family, why not recommend they start using Money Dashboard's free budgeting software to help them prevent overspending and see the true view of their personal finances across all of their bank accounts and credit cards.