It’s all relative: under 35s least likely to seek financial advice from a professional

Money: it’s all relative

As part of our It’s All Relative campaign, we’ve been looking at family finance – and how different generations approach money-focused conversations.

And, according to our latest research, having those conversations could now be more important than ever.

Young people less likely to seek professional advice

We’ve found that people under the age of 35 are the least likely to seek professional financial advice – with just 20% of those we asked saying that they’ve previously sought advice from an IFA.

According to our research – which asked over 3000 people about their attitudes to finances – family and friends are the biggest source of financial advice for those under 35, with 70% of this age group claiming that this is where they seek guidance.

In contrast, the number of people who seek financial advice from an IFA doubles to 40% for those over the age of 55. Interestingly, the number of people in this age group who consult with family and friends about their finances also drops to 53%.

Family focused conversations

It’s clear that different generations turn to very different sources for advice when it comes to all things money – which is why we’ve put a series of guides and articles together to help our customers have those all important conversations. From gifting money for a house deposit, to tackling tricky inheritance tax, or just setting the stage for a productive conversation, we’ve got the tools to help encourage families to talk finance.

Professional advice is a must

But, while it’s important to be able to talk money transparently with family and friends, their advice isn’t the be all and end all, says Emma Graham, our business development director. The role of professional financial advisors cannot be underestimated.

Emma said, “It’s clear from the research that family and friends have a huge influence on all generations when it comes to finances, and in particular, the younger generations. However, it’s important to remember that well-meaning views or personal experiences don’t necessarily mean good advice.

“Seeking advice from family and friends is the most subjective form of guidance, as those closest to you often have thoughts or opinions on how you should live your life, that don’t always match up with your own plans.

“Getting independent advice from a qualified and experienced financial adviser not only ensures you receive objective advice that takes into consideration your own personal circumstances and plans, you’ll receive real value from accessing their expertise and can make those important decisions confidently, knowing you have considered and looked at all the options available to you.”

You can find out more about our It’s All Relative campaign, and the intergenerational study we conducted, here, and in the related articles below.

Related articles

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=""><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="">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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Conditions of financial gifts & family loan agreements

  <span data-contrast="auto">If you have the means, lending to friends and family can be a convenient way to help out loved ones. </span><span data-contrast="auto">In particular, i</span><span data-contrast="auto">t</span><span data-contrast="auto">’s very common to help them with a big financial expense, such as a wedding or buying a house.</span><span data-contrast="auto"> </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">In order to </span><span data-contrast="auto">avoid creating family conflict and confusion</span><span data-contrast="auto">, it’s important that the loan is done correctly and clear boundaries are set out straight away</span><span data-contrast="auto"> – nothing causes tension in families </span><span data-contrast="auto">more </span><span data-contrast="auto">than financial disagreements!</span><span data-contrast="auto"> </span><span data-contrast="auto">Although you may not think </span><span data-contrast="auto">it’s needed</span><span data-contrast="auto">, </span><span data-contrast="auto">family loan agreements</span><span data-contrast="auto"> are incredibly useful as it allows all parties to be completely clear on what to expect. </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">Initial thoughts on family loans and financial gifts</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <span data-contrast="auto">Broaching the subject of gifting or loaning money to family is a bit of a difficult topic to begin with. In fact, </span><a href=""><span data-contrast="none">in a recent survey we carried out on family and finances</span></a><span data-contrast="auto">, we discovered that 56% of over 3000 people surveyed are embarrassed to ask their family for help. </span><span data-contrast="auto">However, with the older generations (over 75), </span><span data-contrast="auto">a huge 58%</span><span data-contrast="auto"> actually </span><span data-contrast="auto">said that they </span><span data-contrast="auto">enjoy helping out their families</span><span data-contrast="auto"> with money,</span><span data-contrast="auto"> so t</span><span data-contrast="auto">here’s no reason to be embarrassed and there’s no need for it to become a taboo topic</span><span data-contrast="auto">!</span><span data-contrast="auto"> </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">Rules on gifting money to family</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <span data-contrast="auto">When it comes to the </span><span data-contrast="auto">rules on gifting money to family</span><span data-contrast="auto">, the first thing you need to consider is can you really afford to lend the money? Think about whether lending the money </span><span data-contrast="auto">means you’ll have enough </span><span data-contrast="auto">for potential </span><span data-contrast="auto">expenditures in the future</span><span data-contrast="auto">. If it’s currently in savings you’ll also need to bear in mind that </span><span data-contrast="auto">this can affect the interest you make</span><span data-contrast="auto">. </span><span data-contrast="auto">Before making this big decision, we always recommend speaking to a financial advisor</span><span data-contrast="auto"> to help you consider all possible ramifications.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">Additionally, </span><span data-contrast="auto">if you’re lending the money as a loan,</span><span data-contrast="auto"> can your family member actually afford to pay you back? Also consider whether they’re </span><span data-contrast="auto">going to be able</span><span data-contrast="auto"> to make </span><span data-contrast="auto">regular </span><span data-contrast="auto">payments over a period of time too. </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Setting a </span><span data-contrast="none">family loan agreement</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Many people think </span><span data-contrast="auto">family loan agreements</span><span data-contrast="auto"> aren’t necessary </span><span data-contrast="auto">due to the personal relationship, but that’s actually precisely the reason why you should have one</span><span data-contrast="auto"> in place.</span><span data-contrast="auto"> A signed loan agreement can help reduce the tension that comes with lending money and will lay out </span><span data-contrast="auto">the terms and </span><span data-contrast="auto">a clear payment plan, helping to avoid the awkwardness of having to ask for the money back</span><span data-contrast="auto"> or resolve disputes later down the line</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">What to include in the </span><span data-contrast="none">family loan </span><span data-contrast="none">agreement</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">The </span><span data-contrast="auto">family loan agreement</span><span data-contrast="auto"> should include details such as a time frame for when the sum is expected to be paid back by, any interest (if applicable) and any consequences for missed payments – you may choose to set a fixed penalty or an interest charge</span><span data-contrast="auto"> for example</span><span data-contrast="auto">. </span><span data-contrast="auto">Consider things like collateral</span><span data-contrast="auto"> –</span><span data-contrast="auto"> if your friend or family member has anything of worth, this can be a good way to ensure your money will be returned to you. </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Think about interest</span></h4> <span data-contrast="auto">If your money was in savings prior to the loan, it may be a good idea to charge at least as much interest as it’d earn in savings to make sure that you don’t lose out. This will also ensure that the loan is seen as a loan and not a gift. </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h4><span data-contrast="none">Keep records</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h4> <span data-contrast="auto">Be sure to sign the </span><span data-contrast="auto">family loan agreement</span><span data-contrast="auto"> and keep a copy for yourself and once you pay the money, make sure it’s traceable to avoid any disputes – never pay in cash.</span><span data-contrast="auto"> After t</span><span data-contrast="auto">he repayments start, en</span><span data-contrast="auto">sure </span><span data-contrast="auto">you</span><span data-contrast="auto"> keep record of all payments.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">Tax implications on family loans</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <span data-contrast="auto">It’s a common belief that because family loans are a personal arrangement, there won’t be any tax implications involved. However, if there’s interest involved</span><span data-contrast="auto">,</span><span data-contrast="auto"> you’ll need to inform HMRC </span><span data-contrast="auto">and fill out a self-assessment </span><span data-contrast="auto">as it may be liable as taxable income. </span><span data-contrast="auto">For loans without interest, you won’t need to tell HMRC.</span><span data-contrast="auto"> Speak to a financial adviser for advice on this and any implications for both parties.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">If the money is gifted instead of loaned, the sum will be free from inheritance tax up to £325,000, but this will only apply if the loaner is alive up to seven years after initial payment.</span><span data-contrast="auto"> Up to £3000 a year can </span><span data-contrast="auto">be </span><span data-contrast="none">gifted without paying tax</span><span data-contrast="none"> </span><span data-contrast="auto">at all and up to £5000 can be given as a wedding gift. </span><span data-contrast="auto">For more information about </span><strong><a href="">inheritance tax on gifting</a></strong><span data-contrast="auto">, read our guide.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <h3><span data-contrast="none">What to do if your family member isn’t paying you back</span><span data-ccp-props="{"201341983":0,"335559738":40,"335559739":0,"335559740":259}"> </span></h3> <span data-contrast="auto">When lending to family, there’s always the risk that they won’t pay you back. If this happens, the first step you should take i</span><span data-contrast="auto">s</span><span data-contrast="auto"> to talk to them and find out what the situation is. It may be </span><span data-contrast="auto">due to personal circumstances</span><span data-contrast="auto"> that have changed or reasons outside of their immediate control.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">Once you’ve spoken to them, there are a number of steps you can take. If it’s due to lack of funds, you can simply adjust the payment schedule or lengthen the loan period. On the other hand, if your friend or family member is being difficult and there’s a </span><span data-contrast="auto">family loan agreement</span><span data-contrast="auto"> in place, you can seek legal action. </span><span data-contrast="auto">For sums below £5000, you may wish to take the issue to small claims court and for larger amounts it’s always best to seek legal advice to find out how best to proceed.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span> <span data-contrast="auto">Now you know the basic</span><span data-contrast="auto"> </span><span data-contrast="auto">rules on gifting money to family</span><span data-contrast="auto"> and</span><span data-contrast="auto"> why it’s best to set up</span><span data-contrast="auto"> </span><span data-contrast="auto">family loan agreements</span><span data-contrast="auto">. </span><span data-contrast="auto">If you’re n</span><span data-contrast="auto">ot sure where to start with</span><span data-contrast="auto"> </span><span data-contrast="auto">the </span><span data-contrast="none">conversation on <strong><a href="">giving or receiving a financial gift</a></strong></span><span data-contrast="auto">, r</span><span data-contrast="auto">ead our article for our top tips and advice, next.</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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