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How to help younger generations with money

Younger generations face plenty of financial challenges and it’s natural to want to help. If you’re fortunate enough to be in the position to gift some of your savings, it will surely be appreciated, however, there are more ways to give others help with money.

We’ve put together our tips to help the people you love, whether adult children or younger kids. They’re split across three areas:

Teaching & guidance

Before handing over any cash, don’t forget how valuable sharing your knowledge and experience is.

1

Build financial independence from an early age

Learning how to manage money well will allow children to grow up to be financially independent. Day to day conversations about money, budgeting, saving and credit all help to improve their understanding and build good habits. What level of financial knowledge should the young people in your life have by this stage? Find the right conversation to have about money by taking a look at our financial learning resources for kids:

Financial conversations can be had at any age, as financial priorities change.

If you know someone who’s struggling to manage their day to day expenses, a tool like our personal budget calculator could help.

2

Teach them about online safety

Anyone who is managing money needs to know how to keep it safe. Unique passwords are the number one tip for staying safe online but it doesn’t stop there. It’s important to stay vigilant online too; like being careful before clicking links in emails or entering payment details onto websites, and watching what you share on social media. For younger children, a good start is teaching them that strangers online aren’t always who they say they are.

Practical help with money

It’s a good feeling when you’ve got savings you can share. Just make sure you leave enough for yourself and any unexpected expenses you might need to deal with.

3

Get up to speed with money gifting rules

Before you give away any money, it’s worth considering money gifting rules. You don’t want your loved ones to be caught out by inheritance tax. The rules depend on when the money is given, how much and who to. For example, gifts given less than 7 years before you pass away are liable for inheritance tax (IHT). You do get some exemptions though. You can give up to £3,000 per year without it being liable for IHT, as well as small cash gifts of £250. There’s also an allowance to give money for a wedding too. The money advice service has more information about money gifting and inheritance tax.

4

Help build children’s savings for the future

Opening a child’s savings account is not only a good way to give money to a child but 85%i of parents we asked said having their own savings account helped children to learn about money too. It gives them a chance to pay money in themselves and see the balance grow.

There are different types of children’s accounts available – take a look at our guide to child savings plans. You can help the children in your life develop different types of savings habits by deciding what level of access you’d like them to have and matching that to a type of savings account. If you’re growing a nest egg for their future, consider an account that doesn’t offer access until the child is older, for example aged 18. If you want to teach them to manage money, from gifts or pocket money, an easy access account may be a better option.

Discover our children's savings accounts and plan for the future today

5

Help reduce their mortgage payments without giving up your savings

Did you know that our offset mortgages allow you to link your own savings with a friend or family member’s mortgage to reduce the cost of their mortgage, without you having to give your savings away?

For example, if you wanted to help a friend or relative, they would need an offset mortgage that allows other people's savings accounts to be linked up. You could then transfer your savings to the linked offset savings account. The more savings in the offset savings account, the less interest your friend would pay on their mortgage.

Your savings remain yours and you can still get access, unlike if you paid off some of the capital for them. But it’s important to note that you wouldn’t earn any interest on your savings.

Personal Planning

Planning ahead for when you’re no longer here can help reduce the financial impact on those dearest to you.

6

Protect them from the future cost of a funeral

The average funeral costs over £4,000ii so although it’s not pleasant to think about, you might want to consider a pre-paid funeral plan. Not only will it protect your family from the cost, but as you make your own arrangements, it also saves them from difficult decisions and worrying about what you may have wanted.

Our 'figuring out funeral plans' guide explains the pros and cons to see if it’s right for you.

7

Get advice on estate planning

Estate planning helps you to prepare your finances and assets to leave to your beneficiaries when you pass away. It can be quite complex so you might want to get expert advice. Considering inheritance taxand writing your wishes in a will can ensure your assets go to the people you want, in the most tax-efficient way.

 

i YBS survey of 1,019 British parents of 6-17 year old children, 2019
ii Matter Communications independent research 2019


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