The cost of living crisis that began after the Covid pandemic has lingered long after life returned to its new normal. Pressure on energy prices has been a persistent problem, affecting not only the cost of filling our cars or heating our homes, but also the price of pretty much everything we buy.
Paying more to cover household costs means there’s little left over for fun, let alone saving.
In light of this, statistics suggesting that around 10 million people are expecting to use an inheritance to help fund their retirement are less surprising than they are sad. [1]
What’s more worrying is the fact that 60% of people who expect an inheritance don’t know how much they’ll receive. [2]
Overcome the awkward – family money conversations are crucial
If you’re yet to discuss your legacy and financial wishes with your family, now may be a good time to start thinking about doing so.
With Christmas approaching, the festive period may present the perfect opportunity to open conversations about finances with family – either collectively or individually.
Read more: Why honest conversations about an inheritance are so important
While you’ll have information you wish to share, be ready to ask questions and find out what might be most helpful to each member of your family.
How you could help your children and grandchildren save for a secure financial future today
Should you wish to provide financial support and start giving while living, there are multiple tax-efficient ways to do so.
Use your annual gifting allowance
Every tax year, you have a gifting allowance that you can use to give money to others free of Inheritance Tax (IHT). In 2026/27, each individual can gift up to £3,000. If you’re planning with your spouse, you could gift a total of £6,000.
Support family with surplus income
Provided you have enough income to maintain your usual standard of living, you could make regular gifts from surplus income, typically without incurring IHT.
Regular gifts could be used to:
• Help support your children with monthly bills
• Make third-party contributions to your child’s pension
• Pay for your grandchild’s school tuition fees.
For the IHT exemption to apply, gifts must form part of your normal expenditure, be made regularly, and not affect your ability to maintain your standard of living. Be sure to record payments, showing an established pattern of giving.
Read more: 5 generous options for giving while living to reduce Inheritance Tax on your estate
These are just two examples – to find out more or discuss what may be most suitable based on your family circumstances, please get in touch.
Understand how gifting wealth early might affect your own financial security
While you may be keen to offer financial support to your children, it’s important to understand how doing so might affect your own financial security.
Your Titan Financial Planner can use cashflow modelling to help you visualise how giving money to children early could affect your long-term financial picture. So, when you offer financial support, you can do so with confidence.
As well as illustrating how lending or gifting a lump sum might affect your lifestyle or long-term plans, the software can show you if giving money now would leave you enough to cover unexpected costs in later life.
If this gives you pause, before you commit to helping financially, think about how you could help in other ways. For example, offering to care for your grandchildren a couple of days a week to reduce money spent on childcare or filling the freezer with nutritious home-cooked meals to cut the weekly shopping bill.
3 quick savings tips to help younger generations take control of their finances
- Make a budget. A basic spreadsheet detailing your monthly income and regular outgoings will help you understand where you’re spending your money and where you may be able to make savings.
- Set a savings goal. It’s easier to save when you have something to look forward to. Write down your goals, including a brief note about why each goal matters to you – this will help keep you focused when you’re tempted to spend on something else.
- Pay yourself first. With a budget showing how much you can afford to save each month and the goals you’re aiming for laid out, set up a standing order to divert the money you want to save into your high-interest savings account or a Stocks and Shares ISA on payday.
Read more: Top tips to help your children and grandchildren manage their money
Get in touch
Working with a financial planner can help you understand all your options and write up an estate plan that works for you and your beneficiaries. If you’d like to start planning for their future today, email info.wp@titanwh.com or call us on 0800 048 0150 to see how we can help you.
Please note
This article is for information purposes only and does not constitute personal financial advice. If you are unsure about whether a particular course of action is suitable for you, we recommend that you seek independent financial advice.
The value of investments and the income from them can fall as well as rise, and you may get back less than you originally invested. Past performance is not a reliable indicator of future performance.
Tax treatment depends on individual circumstances and may be subject to change in the future. Tax and estate planning outcomes are not guaranteed.
The Financial Conduct Authority does not regulate estate planning or cashflow planning.
Titan Wealth Planning Ltd is authorised and regulated by the Financial Conduct Authority (FCA reference number: 574458). Registered address: 101 Wigmore Street, London, W1U 1QU, United Kingdom.
