Baby boomers re­quire good ad­vice for pass­ing on wealth

Sunday Herald - - ADVERTISING FEATURE - Con­tact Shona Barr, Affin­ity IFA Lim­ited, 01292 435 205.

AL­THOUGH it has been sug­gested many grand­par­ents are spend­ing the kids’ in­her­i­tance, re­search shows that they are much more likely to be fo­cused on pass­ing money on to the next gen­er­a­tion.

“In­deed, fears have been voiced that they are of­ten putting the needs of other fam­ily mem­bers be­fore their own en­ti­tle­ment to a fi­nan­cially-se­cure re­tire­ment,” says Shona Barr of Affin­ity IFA Lim­ited.

“The last few years have seen prop­erty val­ues soar, mean­ing that many older peo­ple have built up con­sid­er­able wealth in their homes.

“In ad­di­tion, theirs is the gen­er­a­tion that re­ceived loan-free ed­u­ca­tion and many also ben­e­fited from gen­er­ous fi­nal-salary pen­sion schemes.

“Young peo­ple in the UK are fac­ing a lot of fi­nan­cial pres­sure. Wages have been slow to rise; in­fla­tion has been climb­ing too. The jobs mar­ket com­prises more low-paid, low-skilled jobs than it did a few years ago.

There’s far less eco­nomic cer­tainty for the cur­rent gen­er­a­tion, mean­ing it’s far more dif­fi­cult for them to buy a prop­erty or save enough to en­joy a com­fort­able re­tire­ment.

“It’s of­ten been said that th­ese ‘Mil­len­ni­als’ change jobs fre­quently and aren’t suf­fi­ciently en­gaged with sav­ings or pen­sions.

“How­ever, the facts don’t sup­port this. A report from the Res­o­lu­tion Foun­da­tion found that ‘Mil­len­ni­als’ are stay­ing with their em­ploy­ers for longer than pre­vi­ous gen­er­a­tions, fo­cus­ing on job se­cu­rity rather than chas­ing pay rises.

“Re­search has also shown that in the past three years, more ‘Mil­len­ni­als’ than their coun­ter­parts in ‘ Gen­er­a­tion X’ - those born be­tween the 1960s and early 1980s - have in­creased their pen­sion con­tri­bu­tions. In ad­di­tion, HMRC fig­ures for 2016 showed that 2.7m un­der-35s were con­tribut­ing to a per­sonal pen­sion plan, the high­est num­ber since 2001.

The ad­vent of auto-en­rol­ment is likely to be a pos­i­tive con­tribut­ing fac­tor here.

“’Baby-boomers’ are in­creas­ingly aware of the dif­fi­cul­ties their chil­dren and grand­chil­dren are fac­ing, and worry about how they will get by with less prop­erty wealth, smaller pen­sions and a higher cost of liv­ing. Many grand­par­ents want to give their money away dur­ing their life­times to help their fam­i­lies and to re­duce the amount of in­her­i­tance tax that might other­wise be payable on their es­tates.

“But that may not be the best strat­egy. An IFA will help you plan your fi­nances in a tax­ef­fi­cient way, so that you en­joy your later years whilst help­ing fam­ily mem­bers get a good start in life.”

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