As non-dependent as they are ever going to get!

02 December 2019

Understanding a client and their needs is always vital to ensure that any financial planning advice provided meets their agreed objectives. When family and dependants are considered, it is often noted by clients that the children who are now young adults still seem to be dependent, and even after university this continues. But the squeeze on the middle generations can come in more than one direction.

Younger Generations

This is not uncommon, and the financial needs of our younger folk, borne by older generations, is in part referenced in the Legal & General annual survey called 'The Bank of Mum and Dad' here:

It makes interesting reading and highlights how reliant family members often are on each other. The Legal & General survey notes that the average contribution of family and friends towards a loved one's house purchase in the UK is £24,100. The average is much higher in London, as an example, at £31,000. Legal & General comments that even though transactions are lower than last year, the value of lending from the Bank of Mum and Dad (BoMaD) will add up to £6.3bn in 2019 – 10% higher than 2018 – and making BoMaD the 11th largest mortgage lender in the UK.

Its also interesting to note the gifting from other generations, such as grandparents and other family members and friends, which are not insignificant in the overall picture.

Older Generations

And it's not just young adults relying on a helping hand from their parents; the parents themselves could find that they are giving with both hands, as they support their children onto the property ladder whilst at the same time helping their own parents with care costs, or providing care themselves. Very much the 'squeezed middle'. A recent article on the BBC news website cited research by Sheffield and Birmingham Universities suggesting that two-thirds of UK adults can expect to become an unpaid carer during their lifetimes. More details here:

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The research also suggests that women can expect to take on caring responsibilities for a relative more than a decade earlier than men. Wherever the care burden falls, though, it will put pressure on family finances, and it is likely that the individual providing the care will be financially reliant, at least in part, on a partner or other family member. But what if the main earner can't earn for a period of time, becomes critically ill or dies? Income protection, critical illness cover and life cover can all provide some protection in these types of situation and it's worth exploring the opportunities available to suit the family's needs and circumstances.

The team at Chapters Financial can help to plan the ways in which you can support your loved ones, from gifting of money to the younger generation to putting in place suitable protection for your family. If you would like to discuss these opportunities, then please contact the team in Guildford.

No individual advice is provided during the course of this blog.

Keith Churchouse FPFS


CFP Chartered FCSI

Chartered Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.