A global survey, which included the UK, has found that many households are pessimistic about opportunities for future generations. If it’s something you’re worried about, making your loved ones part of your financial plan could put your mind at ease. 

The research reported by Reuters found that globally just 2 in 5 people believe their families will be better off in the future. In the UK, only 25% of households agreed with the statement “my family and I will be better off in five years”.

A range of factors is influencing this sentiment, including interest rates rising and high levels of inflation. 

Money isn’t the only thing that affects wellbeing, but improved financial security could mean your family has more freedom. So, what steps can you take that could help you feel more optimistic about your family’s future?

1. Talk about finances 

While passing on wealth could improve the financial security of your family, so too can being open to conversations about money. 

Finances can be complex and it can still be something of a taboo subject among families. Being open about money and passing on your knowledge could help your family make better financial decisions. From how saving into a pension led to a comfortable retirement to discussing why overpaying a mortgage could be useful, sharing your insights could be valuable.

It can also be beneficial to share when professional advice has supported your goals. It can mean family members feel more comfortable seeking it themselves, whether they’re making milestone decisions or need some support to boost their day-to-day finances. 

Talking more openly about money could put your mind at ease too. It can alleviate some of the concerns you may have about how they manage finances and what their long-term plans are. 

2. Set out what you want to happen to your assets when you pass away

A key part of your estate plan is setting out what you want to happen to your assets when you pass away. Thinking about this now and writing a will that reflects your wishes could mean you feel confident that your family will be financially secure when you’re no longer here. 

An estate plan can also help you understand what steps you could take to pass on more of your wealth; do you need to consider steps to mitigate Inheritance Tax? Or how could you grow your wealth during your lifetime to leave behind a nest egg?

Please contact us to talk about your estate plan and what’s important to you. 

3. Put measures in place to protect children 

If you have younger family members that you want to ensure the financial security of, there are steps you can take.

You may decide to save or invest in a Junior ISA (JISA) on their behalf, so they can access the money once they turn 18. Or you could create a trust for them, which could provide an income or assets when certain conditions that you set out are met. 

Setting money aside for the next generation as part of your financial plan could set them up for greater financial security when they reach adulthood. 

4. Consider gifting assets now

While leaving an inheritance to your children is traditional, gifting could improve their financial security much more. A well-timed gift to help family reach milestones, reduce outgoings, or support their goals could be more useful than receiving an inheritance later in life. 

For instance, as younger generations struggle to get on the property ladder, gifting a deposit now could improve their finances immediately and over the long term. Estate agents Savills estimates that between 2022 and 2024, parents will lend £25 billion and support almost half of first-time buyers.

If you’re thinking about gifting, you should consider your long-term finances too – ensure gifting wouldn’t harm your financial security now or in the future. 

5. Arrange a meeting with a financial planner 

A financial planner will help you create a plan that reflects your concerns and priorities, including those that involve your family.

You may also want to include your family in some aspects of the financial planning process. It could help them understand the inheritance they may receive and make better financial decisions themselves. 

Please contact us to arrange a meeting to talk about how you could lend financial support to your loved ones. 

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate tax planning, estate planning, or will writing.