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18 Oct 2017

Talk about inheritance with your children, says Saga Money

New research suggests that over-50s are cutting back on essential living costs so that they can build an inheritance pot for their loved ones.

Saga Money has urged families to talk about inheritance after its survey found that while retired people want to save to pass on an inheritance, their children would prefer it if they spent the money on living today.

More than eight in ten children said they would rather their parents spent their money in retirement than leave them an inheritance, yet a similar proportion of parents admitted they were concerned about leaving an inheritance for their offspring. Just under half said that they will not spend frivolously in retirement to ensure there is something left behind for their children.

The research found that half of parents believe it is important to leave an inheritance for their children, although as Saga Money noted: “this sentiment weakens with age, perhaps as the reality of our later life financial position hits home or because as children grow older we see they are less dependent on their parents for financial help.”

Seven out of ten parents said the bulk of the inheritance they expect to leave to their children will come from their home, rising to three quarters of those aged 50 or over. And almost half of parents said that savings will form a big chunk of their children´s inheritance.

Commenting on the findings, Alex Edmans, head of the Saga Equity Release Advice Service, said: “Inheritance can be an emotive issue therefore it is important for parents to discuss inheritance with their children, but they should not feel obliged to leave an inheritance. For those who would like to leave something behind they should realistically consider how best to use the money they have to make sure they have enough to fulfil their retirement goals and have something left for later life care, as well as what to leave for their children.

“People also need to think about the tax implications on the inheritance they leave. With so many people planning to leave property to their children, it would be worth them considering whether to spend the money built up in their property first and leave their pension for the children to inherit. Much more money can be passed on in pensions tax free, than from property.”

What´s your priority: having a comfortable retirement or leaving something behind for your loved ones?

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