A growing number of families and couples are avoiding financial discussions with each another, research from M&G Wealth has revealed.
The study found that a fifth (20%) of UK adults are hiding their finances from their family.
One-in-five (19%) reported that they’re too embarrassed to discuss their financial situation, up from 14% in 2022.
Only half (49%) of respondents talk openly about their finances with their partner, down from 69% in 2022. Almost a quarter (23%) said they wouldn’t discuss their finances with anyone in their family.
The report showed that people are more likely to seek advice from financial websites (21%) or online search engines (18%) than from their partner (15%) or parents (13%).
Around a fifth (21%) of those surveyed worry on a daily basis about having to support their family financially: 11% said this crosses their mind “multiple times per day”.
Some 37% have already reduced savings and investments contributions because of the cost-of-living crisis. An additional 27% plan to do so in the next six months or so.
The research also found that people are starting to look more at gifting as a tax-effective option to support family members.
Three-quarters (75%) of respondents have received some money from parents for a ‘life event’ or to help with ongoing costs and 56% have received money from grandparents.
The number of people who said they’d received no gifts has decreased from 23% to 16% year-on-year.
Some of the most popular ways that parents are gifting money include for a wedding (14%), for a house deposit (12%), to help with bills (12%) and as a contribution to savings and investments (11%).
Despite the increase in the number of people becoming eligible to pay inheritance tax, the report shows that nearly three-in-10 (27%) of those due to inherit from their parents are yet to plan for it.
The amount of inheritance that respondents are expecting to receive has increased for over a third (34%) of respondents, but 13% believe that they will be receiving less than they had previously anticipated.
‘Financial advisers in a good position to facilitate conversations’
Kirsty Anderson, savings expert at M&G Wealth, said: “Discussions about money have always varied between families, but our research suggests that openness between generations is taking a hit in this current cost-of-living crisis.
“In an environment when everyone is feeling the pressure, it is important that conversations about money start at home. Now is not the time to shy away from discussions or hide financial issues, as speaking about problems and being honest with family members can provide the extra mental and emotional support people might need, as well as helping them to create a financial plan.
“Our data shows an increase in the amount of family gifting between generations, with older family members less likely to wait to pass on money through inheritances. Gifting can be a tax-efficient measure to help younger family members deal with life events or daily financial challenges, from buying a house or paying for a wedding, to just helping them to manage their day-to-day bills. Encouraging conversations at home about financial affairs or seeking professional financial advice could help to unlock solutions for those struggling.
“The research shows that financial advisers are in a good position to facilitate these conversations within families, as a growing number of people now have the same adviser as other family members. Individuals benefit from the knowledge of the family’s financial affairs, while enabling them to better prepare for the future from a more informed point of view.”
The research surveyed 2,000 UK adults who have either personally consulted an adviser or whose parents or grandparents have done so, in the last five years.