Think of the children: over-50s reduce personal spending to leave a legacy behind


Think of the children over-50s reduce personal spending to leave a legacy behindA self-imposed need to leave a legacy to loved ones could be causing over-50s to avoid spending money on themselves. This is despite most adults expressing a preference for their parents to enjoy their retirement, even if that means eating into savings and future inheritances.

By the numbers

Research from Saga Money shows that

  • 80% of parents are actively concerned about the amount they will be able to leave for their children when they die
  • Approximately half of those who are worried will be consciously cutting down their spending in retirement to ensure that there are finances left for their children

Not everybody is planning to leave a cash legacy for their loved ones, however, as:

  • 25% of over-50s plan to spend their money and make the most of retirement
  • One third of parents say that they do not have enough money to leave any behind
  • 40% of over-50s are turning to living inheritances to help with large purchases and events, such as weddings
  • 70% of parents and 75% of over-50s say that much of their estate is held in property

The attitude toward inheritance differs between generations, age and even location, with:

  • 63% of Londoners believing that leaving something behind for children is important
  • 20% of people in the East Midlands believing that their financial future is dependent on the inheritance they expect to receive
  • 80% of children would rather their parents use their money to enjoy retirement

Why is inheritance so important to us?

We know that our money and belongings must go somewhere when we die, but why do we worry about it so much?

Inheritance matters are likely to be steered by emotions. A tradition of keeping wealth in the family has been passed down since the 1800’s. This is in addition to the attachment of personal feelings to monetary value. From the scathing remarks and low amounts left to disliked heirs during Edwardian times, to the scandals and unexpected clauses argued in modern probate court, wills and inheritance are a subject which can ignite drama in the most subdued of families.

A parental instinct to provide for the future of our children, a drive to keep wealth within the family and an aim to minimise the amount which will be taken away in Inheritance Tax (IHT) all factor into inheritance and estate planning decisions.

Because there are so many complications surrounding inheritance, it is important to begin planning as early as possible, to make sure that everything is in line before you die, and to give you time to iron out any wrinkles which may affect your family in the future.

Achieving a balance

Retirement is a time for enjoying the fruits of a lifetime of work, and spending money which has been saved for decades to allow you to have freedom when you leave work. Why go to all that effort, to simply pass it on to other people?

In an ideal world, you would be able to give an ample amount to your loved ones and help them to live comfortably, whilst simultaneously improving your own quality of life and enjoying some of the finer things.

The good news is that a balance is possible, with some forethought and a financial plan. By sitting down with a financial adviser, you will develop a plan which enables you to live for today, without sacrificing your own financial future, or the future you wish to provide for loved ones when you are no longer around.