Nearly half (44%) of 35-59-year olds are worried about managing their parents’ finances when the responsibility passes to them, according to the Schroders Personal Wealth Family and Finances Report.
The survey of 1,000 UK adults aged 60 and above and 1,000 UK adults aged 35-59, found that 19% of the older age group have never spoken to their children about their finances. The main reason, reported by the majority (37%) of respondents, was that they want their children to be financially independent.
More than a quarter (28%) don’t think it’s their children’s business to know about their finances and 23% admitted that they find conversations about their finances uncomfortable and overwhelming.
Under a third (27%) of those aged 35-59 stated that they had no idea what their parents’ plans are for passing on their wealth, while 40% said they have some awareness, but don’t know all the details.
Some 32% don’t know who the executor of their parents’ will is, yet 47% of those over 60 and who have a will in place have named their children as the executors of their will.
Worried and overwhelmed
Of the 44% of the younger age group who are worried about managing their parents’ money when they are no longer able to do so, over half (52%) said they are overwhelmed by the prospect and 50% are afraid they might do something wrong.
Almost a quarter (23%) said they don’t know anything about finance so wouldn’t know where to start and 34% reported feeling worried about making decisions that could lose them money.
The survey also found that almost three quarters (74%) of the younger age group do not have a will. Under a fifth (17%) had not given any thought to the inheritance of their own assets. In the group of respondents aged 60 and over, 19% said they did not have a will, 82% had little or no understanding of inheritance tax and 71% did not have a lasting power of attorney.
Promote family money discussions
Ben Waterhouse, chief client officer at Schroders Personal Wealth, said: “As our research shows, not knowing about or understanding family finances can cause sleepless nights and feelings of being overwhelmed.
“We believe that tackling the taboo of talking to your family about money is a key factor for mental well-being. Often, these conversations happen too late, or not at all.
“We believe more needs to be done to encourage stronger engagement with long-term financial planning, as well as promoting family money discussions.”