There is currently a taboo around money which needs to change. Research* from YouGov shows that just 42% of people feel comfortable talking to their family or friends about saving, compared to 62% who are happy to talk about their physical health.
Never mind anyone else, I wonder what percentage of folk are comfortable talking to themselves about their own finances?🤷
With the new year lingering, maybe you need to be more honest with yourself about your current financial situation.
Or more importantly, what’s the plan?
Where is this going?
What do you want your financial future to look like?
Maybe you need to break the taboo with yourself and prepare for your future.
Below are 5 key findings from the YouGov poll, whilst not all will be relevant to you personally, some of them may surprise you nonetheless!
1. Power of Attorney – 49% of retirees feel uncomfortable talking about Power of Attorney with family and friends
The thought process around setting up a Power of Attorney (PoA) is typically misunderstood. Some believe a PoA should only be set up when it is required; however, it is often too late by then to create a PoA in the traditional sense. Instead, someone must apply to the Court of Protection to get the necessary authority and complete time-consuming tasks which are heavily scrutinised. It is estimated that dementia will impact an estimated 2 million people by 2051, making it crucial that everyone gets a PoA in place for this eventuality.
2. Wills – 59% of people don’t have a legal will in place
You can’t take wealth with you when you die and therefore most people would agree that they would like to see their money and assets passed to their loved ones for them to better their own lives. If someone dies without a will then the law decides who gets what and how much, with no consideration for your actual wishes. Not only that, your estate could be taxable! Imagine that, you work hard to be in a position to leave a meaningful legacy, only for the Government to cash in on it.
3. Retirement plans and inheritance – 37% of people are pessimistic about their financial security once they have retired
Making sure your family is aware of how you plan to fund your retirement is essential. If you don’t, your family may have no idea whether your plan involves downsizing, equity release, pension provision or a combination of them all and these decisions could jeopardise this plan. Similarly, as younger generations typically rely on an inheritance to fund the big purchases in life, having frank conversations about your financial position will mean they have a realistic expectation of how much they stand to inherit and can plan accordingly.
4. Money and mental health – only 37% of those surveyed felt comfortable talking to friends or family about a mortgage, with just 22% talking about other debt
If you have any outstanding or regular debt which needs to be paid, it’s critical that you don’t keep it to yourself. Making sure your family is aware of any unpaid bills can take the heavy burden of debt off your shoulders. Likewise, if your family members rely on your income for their day to day spending, sharing your financial position could mean that together as a family you can agree to cut out some of life’s luxuries to help save some money. Small changes to each family member’s lifestyle can add up to a significant saving in the long run. This extra money can then be used to help you become debt free.
5. Millennial Money – 34% of 18 to 24 year olds save absolutely nothing per month excluding pension contributions and 46% of 18 to 24 year olds don’t contribute anything into a pension
The younger faces sitting around the Christmas dinner table may not be looking particularly joyful this year due to the current high cost of living and ever- increasing rents. It might be worth reminding this group of the huge benefits that stem from compound interest. Educating this group about the merits of saving early could mean that they have far merrier Christmases in the future.
I encourage you to make time for a frank financial discussion this Christmas, whether that be with yourself, your life partner or your family. It could have a lasting impact on you and your family and it could be the most meaningful gift you give to yourself and your family this Christmas.
*All statistics come from a YouGov survey commissioned by Quilter, October 2018, of 2000 respondents from across the UK
If you are looking for a collaborative partner to help you and your family succeed financially, then hit me at planning@claritylfp.co.uk and let’s see if we get along!
Financial Planner | Financial Adviser | Investment Advice | Pension Advice | Insurance Advice | West Yorkshire
Recent Comments