3 important financial topics to discuss with your family this holiday season

Christmas is often a time for family bonding, reflection, and planning for the new year.

The holidays are also a great opportunity to take stock of what’s most important in life. While you may not immediately associate Christmas with financial planning, it is the perfect time to talk to your family about the future – your goals, and theirs.

If you’re looking for tips to open up these conversations, keep reading to discover three financial topics to discuss with family during this holiday season.

 

1. Your retirement

If you are planning to retire in the coming years, talking to your family now could make it easier for you to achieve your unique goals.

First, consider what those goals look like. Your ambitions could range between retiring at a specific age, to providing childcare for grandchildren, to travelling the world. Opening up about these topics is an opportunity to dig into the finer details of what achieving these goals might cost, your overall retirement affordability, and what “comfortable” looks like for you.

A comfortable living standard for one person may look very different to someone else, and that can change if you’re single or in a couple. The 2024 Pensions and Lifetime Savings Association (PLSA) Retirement Living Standards report states that the minimum a single person would need to live on in retirement is around £14,400 a year, or £22,400 for a couple. But the PLSA notes that a comfortable lifestyle requires around £43,100, or £59,000 for a couple.

So, you and your spouse or civil partner may want to be open with your adult children and other family members about how your lifestyle might change, along with your financial commitments, once one or both of you retires.

These types of conversations are important, especially as the minimum cost of retirement increases each year. In 2021, the PLSA stated that the minimum cost of retirement was £10,900 a year. That rose to £12,800 in 2023, and now sits at £14,400. As the cost of living increases, it’s likely your spending in retirement will too.

This means you may not always be in a position to provide financial support to family, and you’ll need a plan in place to ensure you’re decumulating at a sustainable rate.

Open communication means everyone knows what’s going to happen when you retire and are all on the same page where money is concerned. At the same time, you can discuss future plans and get everyone excited for what’s to come.

 

2. Your children’s goals

If you can talk openly with your children about their future goals, you could help clarify what you’re able to help with where money is concerned.

While most may initially consider a house deposit as the most significant expense you’ll help with, there are plenty of other ways your adult children may need support. Are they considering expanding their family and need to renovate their homes to accommodate a new addition? Do they want to continue their education and need some help with tuition costs? Or, perhaps they’re ready to start a business and need an initial injection of cash.

Sadly, your children may be putting important life plans on hold because of the cost of living. According to The Standard, 50% of millennials said the cost of living crisis and a lack of growth in wages had stopped them from achieving significant financial milestones.

The same research also noted that despite these challenges, 76% of millennials are still determined to achieve their goals.

With this in mind, you could use the holidays as an opportunity to discuss any support you might provide. Aldermore states that 3.7 million parents with adult children continue to contribute money in order to help them save. And, almost 2 out of every 5 parents have helped, or plan to help, their children with a deposit for their first home.

Additionally, Wealthify notes that 72% of people who receive a lump sum from their parents will also receive specific instructions for how to spend that money, so you can always stipulate how you want your funds to be utilised.

You can speak with an adviser in the new year if you’re interested in offering financial support to your adult children and want to learn more about the process.

 

3. Your family’s legacy plan

Lastly, while on the topic of gifting money, don’t forget that part or all of an inheritance can also be gifted before you pass away. That’s why talks about legacy planning are so important. Ask yourself: “What does providing for my loved ones look like for me, and how can I put these plans into action?”

Indeed, living legacies are becoming more popular, and give you the benefit of seeing your support actually play out. We’ve written some articles about this topic before, so be sure to read those for some extra information.

Read our guide about the surprising benefits of choosing a living legacy for your loved ones or read our article about why giving while living could make a difference for Inheritance Tax.

Even if you aren’t planning to leave a living legacy, ironing out the details of your estate plan with your family could be very useful at this time of year. While it may sound morbid to discuss topics like this (especially during the holiday season), talking about it can help put everyone’s minds at ease.

So, bring your family closer together and ensure that everyone is on the same page when it comes to inheritance and legacy planning this Christmas.

 

Get in touch

An adviser can make having these difficult conversations easier, giving you guidance and support on these topics and more. Let us help you make your goals a reality.

Email info@chancellorfinancial.co.uk, or call 01204 526 846 to speak to an adviser.

If you’re already a client here at Chancellor, contact your personal financial adviser to discuss any of the content you’ve read in this article.

 

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning.