E28: The Bank of Mum and Dad - what's the impact on your pension? With Mark Bogard, Rotimi Merriman-Johnson and Becky O'Connor
The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 28, watch on YouTube, or scroll on to read the conversation.
PHILIPPA: Hello, this is The Pension Confident Podcast. I’m Philippa Lamb and today we’re discussing a hot topic: the Bank of Mum and Dad. Do you help out your adult children with money? For many young people, it’s the only way to afford university or maybe get a foot on the property ladder. For others, it may be help with ongoing costs like childcare bills or even being the main source of childcare. But how might relying on the Bank of Mum and Dad affect family relationships? And what can it mean for your own finances, especially when around one-in-four British families with children are single parent households? And what about grandchildren? You might find yourself contributing all over again. Should the Bank of Mum and Dad stay open for business indefinitely?
Well, today’s guests are here to help us answer that question. Mark Bogard is CEO of The Family Building Society. Hello, Mark.
MARK: Hello. Really good to be here.
PHILIPPA: I know you’ve done a lot of work in this area. A lot of research.
MARK: Yes, it’s how we set The Family Building Society up 10 years ago. We spoke to families about how they manage their money between the generations. So we spent a lot of time listening to people about this.
PHILIPPA: Lots of focus groups.
MARK: Yeah.
PHILIPPA: Rotimi Merriman-Johnson’s back with us again, he’s a Personal Finance Expert and Founder of Mr MoneyJar. It’s nice to see you, Rotimi. Am I right in thinking you’ve just qualified as an Independent Financial Adviser (IFA)?
ROTIMI: I did. I passed my exams in November.
PHILIPPA: So you’re properly an Independent Financial Adviser?
ROTIMI: I’m a proper one.
PHILIPPA: Good for you! Joining us from PensionBee, podcast regular, Becky O’Connor, Director (VP) Public Affairs. Hello, Becky.
BECKY: Hello.
PHILIPPA: The usual disclaimer before we start, please remember that anything discussed on this podcast shouldn’t be regarded as financial advice or legal advice. And when investing, your capital is at risk.
The Bank of Mum and Dad in practice
PHILIPPA: OK, to point out what a big story this is, this statistic caught my eye. This is the Institute for Fiscal Studies (IFS) and it says almost a third of young people receive at least one cash transfer. This is during their 20s or early 30s and it’s most commonly from a parent. It’s a lot, isn’t it? And as far as I can tell from this also, I saw a piece. Yes, I did. I saw a piece in The Times recently that said, one-in-six grandparents are regularly supporting kids or grandchildren. Did you get support from your parents?
BECKY: I have to admit, we did get a little cash injection from my in-laws when we bought our first home, because I was six months pregnant at the time, and I think they were worried that we were going to end up renting forever. So they did give a very timely gift.
PHILIPPA: Yeah, I mean, that’s the thing. Mark? You have children?
MARK: So my father nagged me and nagged me and nagged me and nagged me to buy a property, because it was the best thing I could ever do in my whole life. So in 1988, I bought my first flat with a 10_personal_allowance_rate mortgage from Barclays at 7._corporation_tax.
PHILIPPA: Ow!
MARK: 18 months later, the flat was worth 8_personal_allowance_rate what I paid for it and interest rates had gone up to 15._corporation_tax - because everyone got [a] variable [rate] in those days. So my mortgage was now more than my salary.
PHILIPPA: Oh!
MARK: So I spoke to my father because I couldn’t afford to eat anymore. So over the next 18 months he gave me some money each month, and then interest rates came back down again. But the really interesting thing in this story is about two years later, at some family lunch or dinner, my father leant across and said, “Mark, when am I going to get that money back?” And what I thought was a gift to get me out of the problem he’d got me into...
PHILIPPA: Right.
MARK: It’s a really important point because one of the things we see is that intrafamily money exchanges: one side thinks it’s a gift, the other side doesn’t. All of these things, people have huge misunderstandings. So, that was - I gave him the money back.
PHILIPPA: Interesting. We’re definitely going to get into that because I think you’re absolutely right. The lack of clarity around, “is this money given? Is it a gift? I’m expecting it back”. Rotimi, have you benefited from this yourself? From your parents? Did they help you out?
ROTIMI: No, I can’t say that I have. My parents provided a lot to me in terms of my upbringing and education, but I found myself in a position where I’m transferring money to parents and grandparents. I’m of the generation that’s more likely to help out.
PHILIPPA: Ah, so you’re paying it back? Yeah, OK. Yeah, it’s interesting. But at the point you make is a good one because I think my parents would have said the same, that they gave us a great upbringing, and then when we were launched as adults, we were on our own. But I’m wondering, I mean, I’m a parent myself. You’re a parent, you’ve got kids. Morally, I mean, is there a moral question here? Should we be helping them out? Should they be standing on their own feet?
BECKY: Assuming that you can, then I think a fairly tempered approach to giving is overall a good one because I think you can actually sometimes do more harm than good if you’re too generous, because that can then be very demotivating for them in terms of finding their own way in life. But clearly, there are some big structural problems, particularly in the housing market, that are creating barriers for people living the life that previous generations took for granted. And so naturally, you want to do what you can to help.
Planning for predictable financial support
PHILIPPA: So if we start at the beginning, when do we feel you should even start thinking about your children’s future financial needs? Because I think most parents know at some stage, I mean, obviously, there’s the cost of bringing them up. But you kind of know that if they go off to university, or potentially think about buying property, you’re probably going to be helping. So when do you start?
ROTIMI: There’s certainly a lot of interest for the people that follow me, around saving as early as possible, so that they can benefit from the compounding going forward. Where people are unsure is whether they should save it into the Junior SIPP or Junior ISA (JISA) environment - or use their own one. Or whether they should even let their children know that the money is being saved.
PHILIPPA: Yes. Just thinking about the beginning of this, have you got Junior ISAs (JISAs) for your children?
BECKY: Yes. I don’t really consider those Junior ISA as a deposit fund. I consider those probably they’re more likely to go on cars or university costs or something like that. Something a bit more short-term. But in terms of other savings for them, I think it’s probably a good idea to use your own ISA if you’re worried about how they might spend it before they really need it, if the purpose is a house deposit.
PHILIPPA: They don’t necessarily need to know, do they, [if] you’re saving? Might be quite helpful, not in some ways.
BECKY: I think it’s probably a good idea to hold back a little bit. You don’t want to encourage complacency to save for themselves as well. They might think they don’t need... If you’re saving for them, they might think, “Well, I don’t need to worry then. I’m fine”.
PHILIPPA: Yeah, it should be an ‘add-on’, shouldn’t it? Not an ‘instead’. Yeah. Also, we’re making the assumption people can afford to do this at all because obviously not all households have any spare cash at all to save along this line. There’s a clear divide, isn’t there? Between the ‘haves’ and the ‘have nots’.
MARK: That’s a key part. I think a third of households have less than £100 saved up.
BECKY: I think often [for] parents, their own wealth is actually in their own property. So, it might be that they don’t have any savings, and so that might be their main store of wealth.
PHILIPPA: And they’re living in their investment?
BECKY: They’re living in their investment. Often, that’s actually the pension as well. So I think sometimes people do look to what they can do with their own property - sell it? That often does happen when people are thinking about helping out their kids, too.
ROTIMI: To give a bit more of a flavour to the divide, if I may. When I was reading about a report, also from the IFS, called ‘Who gives wealth transfers to whom and when‘. I found these statistics quite interesting. So, children of [university graduates] and home-owning parents receive six times more than children of renters. White young adults are three times more likely to receive gifts than Pakistani or Bangladeshi recipients. That was what was said in the report. As someone of African heritage, I can also anecdotally corroborate the same for someone from my background. But also wealthier recipients were more likely to use gifts for marriage and for university, whereas the poorer households were more likely to use the gifts to pay off debt or to buy a new car.
Help while your child’s studying
PHILIPPA: Yeah, really interesting. I think the first withdrawal for most people from the Bank of Mum and Dad, if there’s one at all, it comes in early adulthood, doesn’t it? I think it’s about 35% of kids go on to university. Obviously, not all of them do, but it’s a big number. Others may be training or starting the world of work, but on a very low salary. So that phase when we’re helping kids to get ‘job ready‘ and they’re cash poor, I wonder whether people realise just how much they might need to help out at that stage. I was surprised when my son went to university, just how much money was involved in that for me.
BECKY: I think you have your own frame of reference based on your circumstances when you were that age. And obviously, things have changed a huge amount in terms of financial demands quite early into adult life. In reality, if you’re going to help with those things in a meaningful way, that does require, and assuming you’ve got the means, it does require quite a lot of planning in advance because they’re steep. Particularly if you’ve got more than one child.
PHILIPPA: Maintenance loans are really, really low. Rents are really high. It’s a lot of money if you’re able to help out. It’s interesting. And of course, it can go on and on. Because in my generation, we largely did, if we went and did a degree, it was a three or potentially, possibly a four-year degree. Now it’s a Masters, isn’t it? _corporation_tax of young people [are] doing a masters degree now. So we’re not necessarily talking about three years, could be five, could even be six. Should kids work when they’re at university? I did. I worked right through.
BECKY: I did. I’ve been working since I was 14.
PHILIPPA: Me too.
BECKY: It’s depressing!
PHILIPPA: Paper round, Becky? I know some people don’t like the idea of their kids working when they’re students, they’re thinking it might depress their grades.
MARK: You get long holidays. I mean I used to - I did some very funny holiday jobs, but there was one in particular I ended up doing which was market research, ringing people up and asking them questions. If I worked from 9am till 9pm, I got paid £30. In those days, you could go on holiday in the south of France for £10 a day. So, every day...
PHILIPPA: Those were the days!
MARK: ... Every day I did it, Market Investigations Limited, was three days in a tent in the south of France.
ROTIMI: I fully support kids working where they can. My youngest brother’s 18, and he did last year at a fast food restaurant and he managed to save up _basic_rate_personal_savings_allowance over that period. For that reason, he’s really responsible with money.
PHILIPPA: I’m thinking you’ve been a good influence on him, Rotimi?
ROTIMI: I’d like to think that I have been!
Funding your child’s big adult milestones
PHILIPPA: If we think about what happens next in young people’s lives, and we think about they’re through university. Back in the day, it was get a job, move out. Now, definitely not. I mean, most people are heading home again, aren’t they? After university, because rents are so high, maybe they haven’t yet got a job. I think we’ve got a huge proportion. What is it? The share of 20 to 24-year-olds living with their parents rose to over half in England and Wales. This was between 2011 and 2021, ‘the Boomerang Generation’. This is the Office for National Statistics. So this is pretty much the norm now, isn’t it? Should you charge them rent?
BECKY: Perhaps if it’s over an extended period of time, but equally, you could suggest incentives to save. “We could charge you rent, but if you save that money instead, then fine”. But it would have to be on the strict condition that that money was saved and didn’t get blown. That would be a very tricky thing to monitor.
PHILIPPA: It would. How do you police that? I mean, that’s difficult. I don’t know. What do you think?
ROTIMI: Again, coming from my background, the expectation was always that I’d pay rent, and it didn’t need to be a huge amount, but it’d be enough to help out with the bills and with food and stuff. But I think if parents are in a position where they can let their children stay for free, then they should.
PHILIPPA: It’s better, isn’t it? Because rents are record high. As we talked about this on the podcast and on other occasions, they’re ridiculously high. Huge proportion of your take-home pay. In many ways, you might as well have them stashing the cash. Because if you’re thinking as a savvy parent, the more they save now, the less you’re likely to have to help out later. Yeah?
BECKY: Yeah. But of course, it doesn’t always... I mean, if you want a job in London and your parents don’t live in London, for example, then that’s not feasible. So there has to be something -
PHILIPPA: But remote working is changing that in a big way, isn’t it?
BECKY: That’s true, yeah. But I think there’s always going to be some compromise along the way. Actually, living with your parents for a long time when you’re an adult, is difficult in many ways, isn’t it? I think if you can keep it as a short-term arrangement, that suits everybody with a fixed financial goal in mind. But yeah, the rent saving is huge. If you can do it, then why not?
PHILIPPA: Obviously, you talked about buying a property as a young person. This is a lot of people’s aspiration. I think the average first-time buyer, what is it? Is it 35 now? Yeah, it’s remarkably older than it used to be.
MARK: The thing that we learned in talking to the people who’re 25 to 30, they all hate renting because of the people they perceive as being like the landlord. And to move out, almost everyone has to club together, even if you get help from your parents. So they do it with siblings, they do it with friends. It’s not a thing you did on your own anymore, you have to plan. And the final thing is that children of single parents don’t want their single parent to mess up their own finances by helping them. And that’s a really powerful dynamic in their thinking.
PHILIPPA: It’s really interesting you say that. That’s been my personal experience. I’m a single parent. And yeah, I think when kids see you bring them up alone, I think there’s something in that, that sense of, they understand the work you put in, they understand where the money comes from. I think they do perhaps have more of a sense of responsibility. It’s fascinating your data supports it.
Implications of dipping into your savings
PHILIPPA: But if you do decide you’re going to help out with cash for a flat deposit, some thoughts around how to do that. Legal advice, tax advice, what’s the best way to... lump sum from your pension? I mean, I don’t know, pros and cons?
BECKY: Well, I mean, on the pension point, if you’re accessing your own lump sum to give to your children, obviously, you have to make sure that that isn’t going to affect your retirement. And that you’ve really done your sums and you’ve worked out what your costs may be that you don’t know about. You don’t know if you’ve got care costs. You don’t know what’s around the corner for yourself. That’s a really big decision not to be taken lightly and not to be taken too soon either, because you can access that money at 55, rising to 57 in 2028. It doesn’t mean that you should. Unfortunately, very often that need for a house deposit from the children comes around the same time that that lump sum is accessible to the parents. So it can be quite a temptation.
MARK: The whole thing is so complicated. But coming back to the point you made, the single biggest variable for parents and grandparents is their own financial situation. Most people who aren’t in the position where they can give large amounts of money or buy their kids a flat, they’re worried about their own financial circumstances. They don’t know whether they’re going to live to be 70, 80, 90, or 100 [years old]. There are lots of other ways to help which don’t involve giving money or giving money in a way you can get it back because you think, “if I live to be 95, I’m not giving you the money because I’m going to need it”. That’s a really important factor for people.
PHILIPPA: Do you see that? That’s that moment when it looks like there’s cash that’s available and that’s what it gets spent on, or at least some of it gets spent on that?
MARK: Because of the issue of, “I don’t know how long I’m going to live and how much money I need”. So gifting is one option. There are lots of other options which we see parents tend to prefer. So there’s a mortgage called ‘joint borrower sole proprietor‘, where effectively a parent or parents go on the mortgage with the child. The child’s expected to pay the mortgage, but because of the parents there, it may increase the amount they can borrow or reduce the interest rate. Parents can provide security either by way of cash or using the equity in their own home. There are lots of ways that parents can help without actually giving money. And those people tend to be more inclined to do that because it keeps their options open. Because generally, once you give money to a child, even if you think, “look, I may want that back in 20 years time”, it’s gone.
PHILIPPA: You’re nodding, Rotimi.
ROTIMI: Yeah. And the only thing that I’d add is for parents who maybe have smaller amounts to give, smaller amounts given over time could also help, too. The Lifetime ISA (LISA) has a £4,000 per tax year allowance, and any amount put into that would get the _corporation_tax government bonus. So you can give as you go. It doesn’t always have to be a lump sum.
PHILIPPA: What about big cash gifts that, to be brutal, aren’t strictly necessary? We all love weddings. Weddings are lovely. They’re so expensive. This is a time, isn’t it, when a lot of parents feel that they really do need, or want and need to help their kids out with this crucially important day. If parents either foot the bill or make a big contribution, do we think that gives them a say in how lavish the wedding should be?
BECKY: I’d say so.
PHILIPPA: Or do you just have to pay up and be quiet?
BECKY: Yeah. I mean, it’s nice to have a day that everyone can remember for sure. But if the purse strings are tight, then can you have that special day without spending a huge wadge unnecessarily? Then yes, I think you can.
Ongoing bankrolling and protecting your financial security
PHILIPPA: We’ve alluded to open-ended bankrolling a little bit earlier on, but that strikes me as something that it’d be worth talking about, because if we can’t hand over cash, we can hand over time. So, that can be things like childcare, which there’s a cost attached to that, isn’t there? It might be time that you’d otherwise be working and earning. But if you’re helping out with things like childcare costs or car payments, how do you approach that? Because the question - you’ve raised this, we’ve all raised this, your own financial resilience going forward is a completely intangible number, isn’t it? And as you say, it could be when you’re in your 50s, when you get access to pension lump sums, but you don’t know how long you’re going to live, you don’t know what costs you might have, even if you own your own home, around elder care costs or care home costs, all those things. So what’s the best way to do this? And is that a point, actually, when you need to have proper conversations with your grown-up children about how long this support is going to go on for and how much it’s going to be?
BECKY: I think the cost of self-sacrifice does need to be quantified. Again, thinking of my own circumstances, my in-laws have helped us out hugely over the years and saved us thousands of pounds in childcare costs. We’ve also had to pay for nurseries and childminders and what have you, as well. But they’ve done maybe two days a week -
PHILIPPA: Have they?
BECKY: - for 10 years.
PHILIPPA: Wow!
BECKY: And now they pick the boys up from school, and so we don’t have the after-school care costs for the one in primary school anymore. So if you add all that up, that’s worth way more than a deposit. It happened at a time in their life when they were wanting to go part-time anyway. But I think it’s a big decision for grandparents to give up their own incomes to support the younger generation. You just have to make sure that you’re still earning enough to pay into a pension, so that you can eventually give up work. Again, it comes back to that point of not giving up too much for yourself.
PHILIPPA: Yeah.
ROTIMI: When it comes to the topic of finance and of helping yourself vs. helping others, I like to adopt the ‘oxygen mask principle’.
PHILIPPA: Help yourself first?
ROTIMI: Yeah. On planes, they’ll say to mums that you should fit your own oxygen mask before your baby’s because the recognition there’s that if you can’t help yourself, then you won’t be in a position to help them. It’s good to give, and it’s good to want to give, but you need to make sure that you look after yourself first.
PHILIPPA: So it’s being aware of societal pressure, isn’t it? And your own, obviously, natural longing to make sure your kids are OK. But yeah, as you say, perhaps the most useful thing you can do is make sure you’re going to be OK. Because it does strike me that if you run into financial difficulties in later life -
ROTIMI: You can’t help anyone.
PHILIPPA: You can’t help anyone. And your adult children are unlikely to be able to help you out, because they’ll be just in that place where they’ve got all the expenses of kids and maybe university or helping their own kids out with flat deposits. So there’s no buffer for older people, is there at that point? No cash buffer. No one to look after them.
Treating children equally or equitably?
MARK: Genuinely there isn’t, but it’s interesting when you start - so, the joint mortgage sole proprietor, that you talk about, sometimes we see kids helping their parents in that way.
PHILIPPA: Do you?
MARK: So you do, but it’s a much lower number than the other way around. The other thing you haven’t mentioned, which is really difficult for people, is do you treat all your kids equally...
PHILIPPA: Yes!
MARK: ...or according to their needs and their competencies?
PHILIPPA: It’s a very good point.
MARK: Some kids are good with money, some kids are lousy with money.
PHILIPPA: Some people are earning more.
MARK: Some people earn more, some people earn less. If you’re grandparents and you’ve got two or three kids, and they have different numbers of kids themselves, do you treat the grandkids equally or do you treat each of your children equally? And so some grandkids get more. Parents and grandparents really torture themselves with that question because it’s really hard to answer.
PHILIPPA: What’s the rational response?
ROTIMI: To treat them equitably.
PHILIPPA: Yes.
BECKY: Yes.
PHILIPPA: Good word. Yeah, according to need?
ROTIMI: Yes.
PHILIPPA: Yeah.
BECKY: Well, if there’s a certain pot and it’s £90,000 and you’ve got three kids, then they get £30,000 each.
PHILIPPA: Regardless of how much they’re earning?
BECKY: I think so, because if you’re a higher earner and you’ve made that choice and you’ve worked very hard.
PHILIPPA: Oh, but Becky, some really worthwhile jobs pay really badly. I think Rotimi, his definition of equity is different there, isn’t it? I think you’re talking about actual need rather than just dividing things along equal proportions. That’s what you meant, was it?
ROTIMI: Yeah, I think if different children are being - like one child’s being responsible and the other isn’t being responsible, then to continue throwing money at the irresponsible child is unfair. But if one child has a...
PHILIPPA: It’s hard to let them sink.
ROTIMI: But if one child has a job as an investment banker and the other is a nurse, then they’re going to have different financial needs. That latter job is really important, but we don’t have a financial system that’s worked out a way to compensate [for] it adequately. That’s where behaving in an equitable fashion makes more sense.
Making sure you’re on the same page
PHILIPPA: But what you’re saying about siblings or just generally feeling that they haven’t been treated fairly, that they’ve done everything they should do and there’s no money and it damages sibling relationships or damages parent-child relationships. I think that’s a really interesting point because the whole sense of parents continuing to pay, and obviously this assisting with childcare and stuff, this can go on while your kids are into their 40s, this rolls on and on and on. I’m thinking that what we should be suggesting to people is they do sit down and have proper conversations and maybe document them about this, about when this stops and how they’re making their decisions because otherwise, there’s a real opportunity, isn’t there, for fracturing families around money?
MARK: People find it so hard to talk about. Because we do joint proprietor sole owner mortgages, we had one relatively recently, it was a son and his father. So the father was going on the mortgage to help his son get the mortgage. Really unusually, the first mortgage payment was missed. So we rang up the son. So he said, “No, no, no, no, no - my father’s going to pay it”. So we rang his father up and said, “Look, your son says you’re going to pay this mortgage”. So he goes, “No, I’m not. It’s absolutely clear the son’s going to pay it”.
PHILIPPA: So what happened at that point? Did anyone pay it?
MARK: The son ended up paying. But it just shows you that even something as fundamental as who’s going to pay the mortgage in the first month, people find hard to talk about.
PHILIPPA: I mean, this is the thing we talk about on the podcast all the time, the immense value there is in having open conversations.
ROTIMI: And also writing stuff down.
PHILIPPA: Yes.
ROTIMI: A one-pager...
PHILIPPA: And sharing that document.
ROTIMI: ...an email just so that everyone’s on the same page about what’s happening.
PHILIPPA: Yeah.
BECKY: There are huge generational difficulties here, though. There are. I’ll happily talk about money all day long. But the further up the generations in the family you go -
PHILIPPA: That’s my experience too.
BECKY: - the harder that goes.
A living versus willed inheritance
PHILIPPA: I’ve got another one, another key question. We’re going to have to wrap this up soon, but I do want to talk about this. Should you give money, if you’re going to pass it on, should you give it while you’re alive? Or what about just leaving it in your will in your traditional way? I mean, that’s what people used to do. Obviously, there’s tax implications here, aren’t there?
BECKY: I think the tax implications are well worth thinking about there.
PHILIPPA: Run us through it, Becky, how does that work?
BECKY: Well, Inheritance Tax is the biggie. If you leave it when you die, then your estate is potentially liable for Inheritance Tax, depending on what you’re leaving and what assets and how much. That’s something that would come from your estate, so it’d affect your beneficiaries. One way that you can try and help them more generously is to help avoid that tax.
PHILIPPA: Yes.
BECKY: So giving earlier on. There’s a gifting regime set up. So gifts prior to seven years before your death are tax-favourable. Then there’s a taper system for gifts up until that point. And then there are some gifts that you can make that are just tax-free as well.
PHILIPPA: Yes, repeated small gifts. Is it...
ROTIMI: £250.
PHILIPPA: ...£250? Thank you, Rotimi. You can just keep on giving those, can’t you? As often as you like?
ROTIMI: I think it’s ongoing.
BECKY: These are all things worth thinking about. Unfortunately, there’s still probably a predisposition to leave it later, but giving earlier can certainly make a lot of financial sense for everyone.
PHILIPPA: But you do need to do the thing we talked about, of ring-fencing enough for your own unexpected future, whatever that might be, don’t you?
BECKY: And expected future, yeah.
PHILIPPA: It’s very hard to actually put a number on that, isn’t it? About how much... There’s lots of bands about how much we’re going to need when we’re older to live, but there’s all sorts of unexpected stuff, and particularly care costs.
BECKY: Most people don’t retire with enough in their pension to support a moderate living standard. The Pensions and Lifetime Savings Association amount. The average retirement pot is just over _high_income_child_benefit when people reach their mid-60s, which is unfortunately not going to go that far on top of the State Pension. Most people are already retiring, assuming the pension is their only pot, with less than they need. So that’s important to bear in mind. It might feel like a lot when you first access it, but it’s got to last a long time.
PHILIPPA: Given we know that, are we effectively saying you really, really should be thinking about yourself first, as Rotimi says, before you consider at all assisting your kids or grandchildren financially?
BECKY: I think so, but I think there are obvious solutions where you can do a little bit of...
MARK: You don’t have to give money. The one other thing which I’ve seen, there’s a cadre of people that just think that they’ve got to keep it whole, because otherwise water is draining out the bucket and it’s going to be empty soon. There are different segments of people. There are the people who spend too much, but equally, there are people who are just too cautious.
ROTIMI: Yeah, and if you give whilst you’re still alive, then you can actually see the benefits of the money that you’re giving and experience it with your children and grandchildren, which I think is a much more beautiful outcome than [if] you die and then you don’t even know what happens.
PHILIPPA: Yeah, absolutely. I think we do need to wrap this up now, but it strikes me the big lesson here is about managing expectations. Talk to your children about money. We say it again and again on the podcast, don’t we? Thank you all very much indeed.
BECKY: Thank you.
ROTIMI: Thank you.
PHILIPPA: Helping our kids to flourish. I mean, it is what it’s all about for parents, isn’t it? But every family, with or without kids, needs good conversations about money. We do hope that today’s discussion might help you get one of those going in your family. Join us next month. We’ll be discussing how to balance where you put your hard-earned cash. If you enjoyed this episode, please do give us a rate and review. We’d love to hear what you think. Don’t forget, you can watch us on YouTube. And if you’re a PensionBee customer, you can listen to all the episodes in the PensionBee app. Just before we go, a last reminder, anything we’ve discussed in this podcast shouldn’t be regarded as financial or legal advice. When investing, your capital is at risk. Thanks for being with us.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
Period | Market Event | FTSE World TR GBP (%) | 4Plus Plan (%) |
|---|---|---|---|
4Plus Plan’s inception – 6 Sept 2013 | QE Tapering, China Interbank Crisis and its aftermath | -5.44 | -2.41 |
3 Oct 2014 – 15 May 2015 | Oil price drop, Eurozone deflation fears & Greek election outcome | -5.87 | -1.77 |
7 Jan 2016 – 14 Mar 2016 | China’s currency policy turmoil, collapse in oil prices and weak US activity | -7.26 | -1.54 |
15 June 2016 – 30 June 2016 | BREXIT referendum | -2.05 | -1.07 |
