The majority of people are embarrassed to ask for financial help

Is money the key to happiness? According to 30% of people we asked in a recent survey, the answer is yes.

A recent study* conducted by Hodge revealed 56% of people are embarrassed to ask family members for financial help.

We asked more than 3,000 people about their attitude towards money and their financial aspirations for the future. The research included in-depth face-to-face interviews and more than 3,000 shorter interviews, it was designed to help us understand how attitudes towards finance change between the generations.

Future financial security

The research found that while a third of people pin a lot of their future happiness on financial goals, they don’t feel comfortable discussing this with their families.

Emma Graham, business development director for Hodge, explained: “The study highlighted not only how much importance people put on their financial security in the future, but also how difficult families find financial conversations.”

Embarrassment really hits a peak in the 35-45 age group, with 60% thinking it’s awkward asking for financial help. This figure drops with age and 58% of those over the age of 75 are happy to help out financially.

Emma went on to explain: “At Hodge, we view financial circumstances from a lifelong point of view, it’s not just about individual products – it’s a lot more about helping people throughout their lives and understanding their individual and family circumstances and how they change. This study was commissioned to understand how different generations approach their finances and how this evolves over time.”

Talking tricky topics

The study also revealed other areas families are reluctant to discuss, including inheritance planning, with just 23% having spoken to their spouse and only 13% with children (increasing to 35% of grandparents with their children) about inheritance planning. Just 3 in 10 of those aged between 35-54 have a will in place, and only 42% of all respondents organised a will.

This is the first part of our campaign “It’s all relative” which looks at family relationships and how finances impact them. As part of the campaign, Hodge has worked with financial advisor, Siobhan Thomas, who specialises in family finances.

When asked about the findings, Siobhan said: “It’s not surprising that families don’t have these conversations willingly; it’s not an easy subject to broach. But finances within families are often more woven together than most of us realise and consider. Not only with regards to inheritance, but joint ownership of property, investments for grandchildren and parents, there is a lot that happens over time that we as financial advisers are sometimes not party to.

“It’s important to examine how a client’s current and future wealth are connected, and how this then connects to other family members as you plan for their financial journey ahead.”

Emma added: “The ONS family and household report for 2019 showed that households are changing at a fast pace, with lone parent families and same sex families growing significantly each year. It shows that the conventional family unit isn’t typical these days, and conversely neither are our finances.

* The study of 3,000 people was conducted on behalf of Hodge during February 2019

** Office of National Statistics


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Cash gifts from parents: top tips & questions

  <span data-contrast="auto">Whether it’s weddings, birthdays or big purchases such as a car or a house, the “Bank of Mum and Dad” is </span><span data-contrast="auto">increasingly </span><span data-contrast="auto">where the financial help comes from. </span><a href="https://hodgebank.co.uk/intermediaries/news/its-all-relative-new-survey-reveals-that-56-of-people-are-embarrassed-to-ask-family-for-financial-help/"><span data-contrast="none">Our recent survey</span></a><span data-contrast="auto"> has revealed that a third of people have received a financial gift from family, with those aged between 25-34 as the most likely</span><span data-contrast="auto"> recipients. </span><span data-contrast="auto">I</span><span data-contrast="auto">f you’re getting ready to have that difficult money conversation</span><span data-contrast="auto"> with mum and dad</span><span data-contrast="auto">, you’re not alone.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">However, </span><span data-contrast="auto">r</span><span data-contrast="auto">eceiving cash gifts from parents</span><span data-contrast="auto"> doesn’t have to be embarrassing or stressful. Here is what to keep in mind to</span><span data-contrast="auto"> make the whole process as smooth as possible, for both you and your parents.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">Why</span><span data-contrast="none"> can</span><span data-contrast="none"> </span><span data-contrast="none">receiving </span><span data-contrast="none">cash gifts from parents</span><span data-contrast="none"> be difficult</span><span data-contrast="none">?</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <span data-contrast="auto">You’re no doubt relieved </span><span data-contrast="auto">if you know</span><span data-contrast="auto"> that there’s a </span><span data-contrast="auto">cash gift from relatives</span><span data-contrast="auto"> coming your way. </span><span data-contrast="auto">But you might also be secretly dreading the preceding conversation. Understanding why you’re not looking forward to it can actually </span><span data-contrast="auto">help the </span><span data-contrast="auto">conversation move forward</span><span data-contrast="auto"> – often the issue is imagined rather than real!</span><span data-contrast="auto"> Here are the most common reasons why </span><span data-contrast="auto">receiving cash gifts</span><span data-contrast="auto"> can make you feel uncomfortable:</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">You don’t like talking about money</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Money and politics are </span><span data-contrast="auto">carefully </span><span data-contrast="auto">avoided at family dinners and most other social settings, so most of us don’t have enough experience to broach the subject.</span><span data-contrast="auto"> Remember that your parents might feel the same</span><span data-contrast="auto"> way</span><span data-contrast="auto">, so it’s okay to feel a bit uneasy.</span><span data-contrast="auto"> Money doesn’t need to be a negative or taboo topic – everyone needs and uses money after all! </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Past </span><span data-contrast="none">family </span><span data-contrast="none">issues about money</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">There’s a reason why we have the saying “money and family don’t mix”. If you’ve </span><span data-contrast="auto">received cash gifts</span><span data-contrast="auto"> from parents before and things </span><span data-contrast="auto">didn’t go smoothly,</span><span data-contrast="auto"> make sure you clear out any </span><span data-contrast="auto">leftover issues first.</span><span data-contrast="auto"> Sitting down face-to-face and having an open, honest conversation is the best way to move forward.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Strong feelings</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Money </span><span data-contrast="auto">is strongly connected to our</span><span data-contrast="auto"> status</span><span data-contrast="auto"> and how we feel about our </span><span data-contrast="auto">independence or worth</span><span data-contrast="auto">. Remember you’re not the odd one out</span><span data-contrast="auto"> and receiving a gift or loan from a family member is very common. It’s also important to remember that the gift comes from a place of love and wanting the best for you.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Concerns about your parents’ financial stability</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Children often worry that parents can be overly zealous in trying to help and forget that they have their own financial needs to take care of. Involving a third party such as a financial adviser can be beneficial for everyone involved. You’ll know that your parents are protected and they’ll know they’re giving you the best possible financial assistance.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">Top tips when </span><span data-contrast="none">receiving a cash gift from parents</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <span data-contrast="auto">Whether you’re getting prepared to ask for the cash gift or your parents are already thinking of giving you one, here are a few things you can do before and during the conversation so you and your family can make the most out of it:</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Be prepared</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Research is incredibly important, so make sure you are prepared well in advance however you intend to spend the money. Know how much money you require and whether you need to rely on your parents for future expenses as well. Giving them the full picture beforehand will help them plan their finances better and give you the support you need.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Be clear</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Clarify, clarify, clarify. Is it a l</span><span data-contrast="auto">oan or </span><span data-contrast="auto">a </span><span data-contrast="auto">gift</span><span data-contrast="auto">? Are you </span><span data-contrast="auto">being given</span><span data-contrast="auto"> a blank cheque or </span><span data-contrast="auto">do </span><span data-contrast="auto">conditions apply? </span><span data-contrast="auto">Will your parents have part ownership of the property or possession you’re trying to buy? </span><span data-contrast="auto">It might seem like you’re conducting business instead of talking to mum and dad, but </span><span data-contrast="auto">getting the wrong idea about what it is they’re offering you </span><span data-contrast="auto">will make it much more difficult further down the line. If you’re not sure, ask for clarification at every step.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Keep a record</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Receiving a </span><span data-contrast="auto">cash gift from a relative</span><span data-contrast="auto"> off the record is </span><span data-contrast="auto">fine</span><span data-contrast="auto"> for small gifts, but can spell trouble for more substantial ones. It’s always a good idea to outline the main points of the conversation in writing, especially if there are conditions to be </span><span data-contrast="auto">met</span><span data-contrast="auto"> or if the gift </span><span data-contrast="auto">is meant to be paid back later.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Be patient</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">If you’re the one raising the topic with your parents</span><span data-contrast="auto"> first</span><span data-contrast="auto">, give them plenty of time to figure out what is the best way to assist you financially. Parents may also want to know how you’re spending the money and </span><span data-contrast="auto">perhaps </span><span data-contrast="auto">have an input in that decision. Move the conversation forward by being patient and trying to put yourself in their shoes.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Plan for a c</span><span data-contrast="none">hange of circumstances</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">You might have to</span><span data-contrast="auto"> sell the house</span><span data-contrast="auto"> your parents helped you pay for, or they may experience financial difficulties later on in life</span><span data-contrast="auto">. </span><span data-contrast="auto">Even f</span><span data-contrast="auto">all</span><span data-contrast="auto">ing</span><span data-contrast="auto"> out </span><span data-contrast="auto">with your family is a possibility. Make sure you discuss what should happen in these unfortunate circumstances before you </span><span data-contrast="auto">receive a cash gift from parents</span><span data-contrast="auto">.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">Top questions to ask before receiving </span><span data-contrast="none">cash gifts from parents</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <ul> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="1" data-aria-level="1"><span data-contrast="auto">Can my parents </span><span data-contrast="auto">afford to </span><span data-contrast="auto">give me money?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="2" data-aria-level="1"><span data-contrast="auto">Is it a l</span><span data-contrast="auto">oan or a gift</span><span data-contrast="auto">?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="3" data-aria-level="1"><span data-contrast="auto">Are there any conditions for </span><span data-contrast="auto">receiving the cash gift</span><span data-contrast="auto">?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="3" data-aria-level="1"><span data-contrast="auto">Once the </span><span data-contrast="auto">cash </span><span data-contrast="auto">gift is given will the property </span><span data-contrast="auto">or possession bought </span><span data-contrast="auto">be </span><span data-contrast="auto">entirely yours?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="3" data-aria-level="1"><span data-contrast="auto">Will your parents want to have a say in</span><span data-contrast="auto"> what </span><span data-contrast="auto">you</span><span data-contrast="auto"> purchase?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="3" data-aria-level="1"><span data-contrast="auto">What happens if you sell the </span><span data-contrast="auto">property</span><span data-contrast="auto"> they helped you purchase?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> </ul> <span data-contrast="auto">Did you know that you may have to pay </span><span data-contrast="auto">tax on the gift from your parents</span><span data-contrast="auto">? Make yourself familiar with </span><span style="text-decoration: underline"><a href="https://hodgebank.co.uk/2020/08/05/gifting-and-inheritance-tax/">Inheritance Tax rules and wedding gift taxes</a></span><span data-contrast="auto"><span style="text-decoration: underline"> </span>to avoid unpleasant tax bills in the future.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span>

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The right way to ask your family for money

  <span data-contrast="auto">So many of us have been in this situation – you’ve got a big expense coming up and you’d love some financial support from your family. M</span><span data-contrast="auto">aybe you’re ready for </span><span data-contrast="auto">that first</span><span data-contrast="auto"> house or </span><span data-contrast="auto">due to get married and a little help from a loved one would make all the difference.</span><span data-contrast="auto"> And as uncomfortable as the thought makes you feel, </span><span data-contrast="auto">asking your </span><span data-contrast="auto">family for money</span><span data-contrast="auto"> </span><span data-contrast="auto">might be the </span><span data-contrast="auto">responsible thing to do</span><span data-contrast="auto">.</span><span data-contrast="auto"> </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">The good news is that a</span><span data-contrast="auto">sking </span><span data-contrast="auto">family</span><span data-contrast="auto"> for help doesn’t have to be an awkward affair.</span><span data-contrast="auto"> Remember, they are likely</span><span data-contrast="auto"> looking forward to supporting you</span><span data-contrast="auto"> the best they can. </span><span data-contrast="auto">In fact, in </span><a href="https://hodgebank.co.uk/intermediaries/news/infographic-money-its-all-relative/"><span data-contrast="none">a recent study we carried out on family finances</span></a><span data-contrast="auto">, we discovered that 58% of over 75’s actually enjoy helping out financially. </span><span data-contrast="auto">Keep reading to find out </span><span data-contrast="auto">how to ask family for money</span><span data-contrast="auto"> in a way that puts a clear case forward </span><span data-contrast="auto">and get</span><span data-contrast="auto">s</span><span data-contrast="auto"> loved ones to jump in and help.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">But first, </span><span data-contrast="auto">what if you don’t</span><span data-contrast="auto"> really need th</span><span data-contrast="auto">e</span><span data-contrast="auto"> extra help</span><span data-contrast="auto">?</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">Borrowing money from family</span><span data-contrast="none"> might not be necessary</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <span data-contrast="auto">You’re probably thinking</span><span data-contrast="auto"> your budget doesn’t stretch any further</span><span data-contrast="auto">. But i</span><span data-contrast="auto">t might not even have to. Before </span><span data-contrast="auto">asking a family member for a loan</span><span data-contrast="auto"> or a money gift</span><span data-contrast="auto">, c</span><span data-contrast="auto">heck your spending habits</span><span data-contrast="auto"> and look for </span><span data-contrast="auto">costs</span><span data-contrast="auto"> you can cut back on. If you’re not pressed for time, consider saving a set amount each month, or look for ways to earn extra money. Even if you do end up </span><span data-contrast="auto">asking family for financial help</span><span data-contrast="auto">, you’ll have peace of mind knowing that you’</span><span data-contrast="auto">ve looked at all the options. And, who knows, maybe you’ll realise you don’t </span><span data-contrast="auto">even </span><span data-contrast="auto">need as much money as you initially thought.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">How to ask family for money</span><span data-contrast="none">: top questions</span><span data-contrast="none"> to address</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <span data-contrast="auto">Start by choosing the right moment and place so you can have a productive conversation in a setting with no immediate interruptions in sight. Once you’ve settled in, here are the top things to address when asking for </span><span data-contrast="auto">financial help from family</span><span data-contrast="auto">:</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Why you need the money</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Even if your family member has the ability and willingness to help, you still need to make a good case for why you need their financial assistance. </span><span data-contrast="auto">In our survey, we discovered that the biggest reason financial gifts were offered and received were weddings, with other popular reasons includ</span><span data-contrast="auto">ing</span><span data-contrast="auto"> assistance with living costs and to help clear debts. </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">When broaching the subject, b</span><span data-contrast="auto">e prepared, honest and clear. Bring </span><span data-contrast="auto">in </span><span data-contrast="auto">the number</span><span data-contrast="auto">–</span><span data-contrast="auto">crunching sheet you’ve worked out and any </span><span data-contrast="auto">other documents you think are</span><span data-contrast="auto"> relevant. But above all, be open and let </span><span data-contrast="auto">them know exactly what you need money for and why your current budget</span><span data-contrast="auto"> isn’t</span><span data-contrast="auto"> able to cope. This will help your family understand your </span><span data-contrast="auto">situation </span><span data-contrast="auto">better </span><span data-contrast="auto">and offer their best solution.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">How much money you </span><span data-contrast="none">need</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Asking family for money</span><span data-contrast="auto"> </span><span data-contrast="auto">might get </span><span data-contrast="auto">trickier if you’ve already asked them for help, but then realised later on it wasn’t enough. This is why it’s always a good idea not only to come up with an exact amount of money, but the right amount as well. Don’t be tempted to ask for more than you need just to be on the safe side. Instead, mention that the amount you need is based on current circumstances, and ask whether you’ll be able to have another conversation if th</span><span data-contrast="auto">ings</span><span data-contrast="auto"> change in the future. Your family will likely be flexible and even appreciate your forward thinking.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">How will you give it </span><span data-contrast="none">back</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">If you’re </span><span data-contrast="auto">asking a family member for a loan</span><span data-contrast="auto"> instead of a gift, think of how you will be able to give it back. Consider repayment terms, including interest rate, as well as a timeline you’ll be comfortable with. Coming up with a repayment plan will often make the conversation with your family </span><span data-contrast="auto">smoother</span><span data-contrast="auto"> and they’ll be grateful you’re making life easy by suggesting a solution. </span><span data-contrast="auto">If you need inspiration, we’ve put together an easy </span><span data-contrast="auto">guide to working out conditions for a family loan</span><span data-contrast="auto">.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">Don’t forget to offer your family time to think things over, even if they’re eager to help. If you’re asking for a substantial </span><span data-contrast="auto">sum</span><span data-contrast="auto">, consider getting expert advice as well. A financial adviser will be able to guide you and your family through the process, while offering peace of mind for everyone involved.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">What happens if you’re not able to repay the loan, or meet the conditions</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Unexpected events do happen and circumstances can change. Be open with your family and discuss what you should do if you find yourself unable to cope in the future. Remember your family is there to help you, so have an honest conversation about the concerns you may have. It’s likely they’ll share the same ones, so addressing them out in the open, at the very beginning, sets the whole process of </span><span data-contrast="auto">borrowing money from family</span><span data-contrast="auto"> up for success.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span style="text-decoration: underline">Top 4 tips when asking family for money </span></h3> <span data-contrast="auto">A successful conversation about money does rely on </span><span data-contrast="auto">a bit of preparation</span><span data-contrast="auto"> beforehand. Here are a few things to consider before sitting down with loved ones for the big chat:</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">1. Know the pros and cons of </span><span data-contrast="none">asking a family member for financial help</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">You might be looking forward to the low interest rate from a family loan, but are you ready for the strain a money agreement </span><span data-contrast="auto">might</span><span data-contrast="auto"> put on your relationship? Here are a few advantages and disadvantages</span><span data-contrast="auto"> to mixing family and money</span><span data-contrast="auto">, but make sure you add your own to the list:</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <b><span data-contrast="auto">The pros of </span></b><b><span data-contrast="auto">getting </span></b><b><span data-contrast="auto">a family loan:</span></b><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <ul> <li data-leveltext="" data-font="Symbol" data-listid="9" data-aria-posinset="1" data-aria-level="1"><span data-contrast="auto">Low or no interest rate</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> </ul> <ul> <li data-leveltext="" data-font="Symbol" data-listid="9" data-aria-posinset="1" data-aria-level="1"><span data-contrast="auto">Flexible terms and repayment schedule</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="9" data-aria-posinset="2" data-aria-level="1"><span data-contrast="auto">Quick financial help</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> </ul> <b><span data-contrast="auto">The cons of </span></b><b><span data-contrast="auto">asking family for money</span></b><b><span data-contrast="auto">:</span></b><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <ul> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="3" data-aria-level="1"><span data-contrast="auto">The</span><span data-contrast="auto"> uncomfortable</span><span data-contrast="auto"> conversation</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="4" data-aria-level="1"><span data-contrast="auto">It might put a strain on your relationship</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="4" data-aria-level="1"><span data-contrast="auto">Missed opportunity to build up your credit score</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> </ul> <h4>2. Choose the family member wisely</h4> <span data-contrast="auto">Who </span><span data-contrast="auto">you’re asking for help</span><span data-contrast="auto"> is a crucial </span><span data-contrast="auto">part of the </span><span data-contrast="auto">decision.</span><span data-contrast="auto"> Make sure it’s someone you’re in a good relationship with and, most importantly, that they’re in a good financial position themselves. Oftentimes</span><span data-contrast="auto"> what makes the conversation awkward is </span><span data-contrast="auto">not that you’re asking for money</span><span data-contrast="auto">, but </span><span data-contrast="auto">that you’re asking the wrong person.</span><span data-contrast="auto"> So be mindful of their financial security as much as you are of your own.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">3. Talk to an adviser</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">There are other reasons, beyond </span><span data-contrast="auto">a potential </span><span data-contrast="auto">awkward conversation, that make </span><span data-contrast="auto">borrowing money from family</span><span data-contrast="auto"> difficult. </span><span data-contrast="auto">Did you know that money </span><span data-contrast="auto">gifts</span><span data-contrast="auto"> can come with hefty tax bills too? </span><span data-contrast="auto">Or that your family can do more harm than good by offering to help more than they can afford to? </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">Since most of us are unlikely</span><span data-contrast="auto"> to</span><span data-contrast="auto"> </span><span data-contrast="auto">talk about</span><span data-contrast="auto"> money with our families</span><span data-contrast="auto"> on a recurring basis</span><span data-contrast="auto">, we </span><span data-contrast="auto">might not</span><span data-contrast="auto"> have enough experience to keep ourselves and our loved ones out of trouble. This is why asking for expert help is one of the best ways to keep potential financial or legal problems at bay. Plus, you and everyone in the family will feel safe knowing that you’ve found the best possible solution</span><span data-contrast="auto">, while keeping your financial positions secure</span><span data-contrast="auto">.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">If you want to find out more about the tax that may apply to the money gift from your family, our </span><span data-contrast="auto">inheritance tax guide </span><span data-contrast="auto">answers </span><span data-contrast="auto">some of the most common questions</span><span data-contrast="auto">.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">4. Keep notes</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Whether it’s a money gift that comes with certain conditions, or a loan with specific repayment terms, make sure you capture </span><span data-contrast="auto">in writing </span><span data-contrast="auto">all the responsibilities that come with the </span><span data-contrast="auto">financial help</span><span data-contrast="auto"> from your family</span><span data-contrast="auto">. This way you can avoid misunderstandings, while having a document both you and your family can go back to </span><span data-contrast="auto">if</span><span data-contrast="auto"> necessary. </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">Next, read our </span><span data-contrast="auto">handy </span><span data-contrast="auto">article</span><span data-contrast="auto"> on </span><strong><a href="https://hodgebank.co.uk/2020/07/17/receiving-cash-gifts-from-parents/">Cash Gifts from Parents</a></strong><span data-contrast="auto"><strong> </strong>where we go through all the reasons why it’s </span><span data-contrast="auto">often considered </span><span data-contrast="auto">a difficult conversation and how you can make it easier for you and your family.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span>

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The Easy Guide to Gifting Money to Family

  <span data-contrast="auto">Talking about money with family is difficult. But not talking about money with your family makes things even harder.</span><span data-contrast="auto"> And this is especially true when it comes to giving a financial gift.</span><span data-contrast="auto"> Whether it’s </span><span data-contrast="auto">to help your loved ones</span><span data-contrast="auto"> to get on the property ladder, </span><span data-contrast="auto">paying for</span><span data-contrast="auto"> a wedding or buying a car, </span><span data-contrast="auto">giving money to family members</span><span data-contrast="auto"> is increasingly </span><span data-contrast="auto">common practice. And yet for many families it continues to be a minefield of misunderstandings, when that doesn’t need to be the case!</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">Keep reading to find out what makes the conversation difficult to navigate and how to make it easier for the </span><span data-contrast="auto">whole </span><span data-contrast="auto">family</span><span data-contrast="auto">, including yourself</span><span data-contrast="auto">.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">What makes </span><span data-contrast="none">gifting money to family</span><span data-contrast="none"> difficult?</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <span data-contrast="auto">Whether you are</span><span data-contrast="auto"> being approached by </span><span data-contrast="auto">a loved one with a request, or you’re making an unsolicited gift,</span><span data-contrast="auto"> the money conversation </span><span data-contrast="auto">doesn’t come easy to many of us</span><span data-contrast="auto">. Here is what </span><span data-contrast="auto">usually </span><span data-contrast="auto">makes it </span><span data-contrast="auto">the</span><span data-contrast="auto"> </span><span data-contrast="auto">topic</span><span data-contrast="auto"> </span><span data-contrast="auto">that families</span><span data-contrast="auto"> avoid</span><span data-contrast="auto">:</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Money is</span><span data-contrast="none"> still</span><span data-contrast="none"> considered a taboo topic</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">There are many reasons why money is such a touchy subject. Although a lot of them stem from our deeply rooted social habits, circumstances and upbringing can also decide how the conversation will go. </span><span data-contrast="auto">B</span><span data-contrast="auto">e mindful of how sensitive the topic is to your family</span><span data-contrast="auto">, especially if you don’t have a habit of discussing money together.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Fairness</span><span data-contrast="none"> </span><span data-contrast="none">between family members</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">G</span><span data-contrast="auto">ifting money to grandchildren</span><span data-contrast="auto"> or children</span><span data-contrast="auto"> sometimes</span><span data-contrast="auto"> brings up the difficult topic of fair share and whether you should offer equal help or prioritise those members in the family who need help the most.</span><span data-contrast="auto"> Whatever your decision, make sure you take the time to explain it fully to avoid misunderstandings</span><span data-contrast="auto"> and resentments, and be prepared to answer questions they may have.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">How money is used</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Even if you agree on </span><span data-contrast="auto">how much you can gift your children</span><span data-contrast="auto"> or other family members</span><span data-contrast="auto">, the way they intend to spend those financial resources might not be aligned with your opinions about what’s better or more efficient.</span><span data-contrast="auto"> Try to keep an open mind when it comes to their wishes</span><span data-contrast="auto"> and their perspective.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Worries about your own financial security</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Even</span><span data-contrast="auto"> if you are in the lucky position to be able to help your family, it can be difficult to find the </span><span data-contrast="auto">right </span><span data-contrast="auto">balance between your family</span><span data-contrast="auto">’s</span><span data-contrast="auto"> financial needs and your own. </span><span data-contrast="auto">We really recommend talking to a financial adviser before making any decisions, to ensure you have all the information you need upfront.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">Why is it important to talk before </span><span data-contrast="none">giving money to family members</span><span data-contrast="none">?</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <span data-contrast="auto">Despite </span><span data-contrast="auto">its reputation for being a thorny subject, it’s the very act of discussing money thoroughly with family that </span><span data-contrast="auto">stops it from becoming the </span><span data-contrast="auto">root </span><span data-contrast="auto">of arguments later on. </span><span data-contrast="auto">Having an open conversation is a great opportunity for forward thi</span><span data-contrast="auto">nking and establishing ground rules. Problems arise when a lack of communication creates misunderstandings.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">No one wants to think about </span><span data-contrast="auto">how an upcoming house purchase would be affected by a separation or divorce</span><span data-contrast="auto">. But it’s easier to have an honest conversation upfront about what should happen in these specific circumstances, </span><span data-contrast="auto">rather </span><span data-contrast="auto">than scrambling for a solution later on.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">How to talk</span><span data-contrast="none"> about </span><span data-contrast="none">gifting money to family</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <span data-contrast="auto">Here are a few tips to help you</span><span data-contrast="auto"> navigate</span><span data-contrast="auto"> the money conversation a bit easier:</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4>Be clear</h4> <span data-contrast="auto">Make sure your family members know whether the financial assistance you’re offering is meant as a gift or as a loan. It may seem obvious to you, but the potential for misunderstandings is especially high when it comes to </span><span data-contrast="auto">unstated </span><span data-contrast="auto">intentions. If there are </span><span data-contrast="auto">repayments or </span><span data-contrast="auto">conditions to be met, make those clear as well. Keeping a record of the agreement is also useful, especially for substantial gifts or if the money is intended as a loan.</span><span data-contrast="auto"> We recommend using a financial adviser to help you draw up official paperwork that clarifies where everyone stands.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4>Be honest</h4> <span data-contrast="auto">It’s natural to feel uneasy or embarrassed if the conversation moves around specific conditions for the money gift,</span><span data-contrast="auto"> or how</span><span data-contrast="auto"> siblings</span><span data-contrast="auto"> will</span><span data-contrast="auto"> share your financial support</span><span data-contrast="auto">. It’s normal to have</span><span data-contrast="auto"> fears about </span><span data-contrast="auto">giving money to family members</span><span data-contrast="auto"> </span><span data-contrast="auto">and what this </span><span data-contrast="auto">might mean for your own standard of living or wellbeing later on in life. Remember that the same</span><span data-contrast="auto"> worries are likely to exist</span><span data-contrast="auto"> on the other end of the conversation, and your family will likely prefer to discuss this openly to make sure everyone is taken care of.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4>Don’t rush into making a decision</h4> <span data-contrast="auto">If you’re being approached by </span><span data-contrast="auto">a family member</span><span data-contrast="auto"> asking for financial support, make sure you take your time before making any decisions. Even though you intend to offer the money as a gift, you need time to </span><span data-contrast="auto">decide </span><span data-contrast="auto">how much can you gift your children</span><span data-contrast="auto"> or other relatives that may need the help. Remember to also find out when </span><span data-contrast="auto">giving money to someone is taxable</span><span data-contrast="auto"> to avoid hefty tax bills</span><span data-contrast="auto"> – a financial adviser is the best person to help with this.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4>Put yourself in their shoes</h4> <span data-contrast="auto">Thinking of the hopes and concerns your family member</span><span data-contrast="auto">s</span><span data-contrast="auto"> may have will help keep the conversation constructive.</span><span data-contrast="auto"> Try to see it from their perspective as well, and take a break if the conversation gets off course or becomes emotional.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3>Top questions to ask before giving money to family members:</h3> <ul> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="1" data-aria-level="1"><span data-contrast="auto">How much money </span><span data-contrast="auto">do </span><span data-contrast="auto">they need</span><span data-contrast="auto">?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="2" data-aria-level="1"><span data-contrast="auto">H</span><span data-contrast="auto">ow much can you</span><span data-contrast="auto"> afford to</span><span data-contrast="auto"> gift</span><span data-contrast="auto"> right now</span><span data-contrast="auto">?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> </ul> <ul> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="1" data-aria-level="1"><span data-contrast="auto">Will they need further financial assistance in the future?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="2" data-aria-level="1"><span data-contrast="auto">If there are conditions you want to put forward, do they understand them and agree to uphold their part of the deal?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="3" data-aria-level="1"><span data-contrast="auto">What happens if the family relationship breaks down?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> <li data-leveltext="" data-font="Symbol" data-listid="10" data-aria-posinset="4" data-aria-level="1"><span data-contrast="auto">What happens if you encounter financial difficulties later on?</span><span data-ccp-props="{"134233279":true,"201341983":0,"335559739":160,"335559740":259}"> </span></li> </ul> <span data-contrast="auto">Keep in mind that </span><span data-contrast="auto">i</span><span data-contrast="auto">nheritance Tax </span><span data-contrast="auto">rules may apply when giving money to your family. Find out </span><span data-contrast="auto">how much you can gift per year</span><span data-contrast="auto"> and what the potential tax liabilities are with our handy guide, next. </span>

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