Jonathan Brown, senior consultant at Isio Wealth Planning says he has also seen older clients less focused on passing on wealth or mitigating inheritance tax planning, and more focused on enjoying the fruit of their labours.
He says there's an element of the "job-for-life boomer generation" who have saved and invested well and benefited from a rapid property value growth.
These can often be so focused on ensuring they have enough to live comfortably and can afford any care they might need in retirement they do not make plans to pass wealth on tax-effectively.
He explains: “Sometimes the conversation we are having with this group is to encourage them to enjoy the financial security they have built up and be more relaxed about outgoings, while still planning ahead.
“Meanwhile, the generation below may have much higher day-to-day living expenses than their parents did, with more foreign holidays a year, increasing school feels, university planning for children, and ambitions for a larger property.
“There is certainly a weight of expectations around inheritance for millennials and below, but often clients have no idea what that might amount to as these conversations rarely take place.”
Brown believes when it comes to wealth transfer there are “all sorts of compromises” to be had to bridge the divide between the generations, such as putting wealth in trust to be drawn upon for certain use, or investing in a pension on behalf of children.
This can help reassure the givers that money will be used well and wisely, and open up bigger conversations around saving for particular goals.
“We’ve even had conversations with clients who are keen to ‘match save’ with children making an equal contribution to a property deposit for example,” he adds.
Ways to save
Megan Rimmer, chartered financial planner at Quilter Cheviot, agrees parents tend to be mindful of their child’s personality when it comes to money, most often in terms of whether they are more of a saver or a spender.
She says: "This can create some challenges when there are two or more siblings with differing personalities as though their parents wish to gift money to each of them, they may be more concerned about the way the money will be spent by one than the other.
“In such scenarios, the parents may opt for a trust whereby the settlor (the parent) would have more control over how and when the money is spent."
She agrees with Brown that, if a client is particularly concerned about their child or grandchild’s spending habits, then saving into a pension where the recipient cannot touch the money until retirement may be of interest, although this might not provide the financial support a young person might need more immediately.
