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Should You Spend Your Kid’s Inheritance?

Posted on 4 December 2017

The UK population is living longer and enjoying more active retirements than ever before, spending our golden years travelling, taking up new hobbies and generally enjoying our new-found freedom.

With younger generations feeling more cash-strapped than ever, some of us might feel under pressure to stop spending money that could be left to the kids. Our recent Cash Happy research revealed that 1 in 5 grown up children are banking on an inheritance from their parents to help them financially.

The inheritance tug of war. 19% of parents plan to rely on their children for financial support. 18% of children plan to rely on their parents inheritance to pay off debt.

The research also revealed a flip side to the inheritance debate. For some, their inheritance may come at a price, or maybe even not at all - with almost one in five adults with children expecting their children to support them financially when they get older.

Having worked hard all your life, it’s understandable to want to spend your well-earned cash just as you wish. Being retired means that you can enjoy your new-found freedom, and being able to go on holiday or buy that new kitchen you’ve been waiting for shouldn’t be an issue.

How do people spend their inheritance?

If you’re thinking about spending your money rather than saving it for the kids, it might be an idea to understand what people spend their inheritance on. It could help you decide if your kids really need the cash or if you can book that extra holiday this year and feel guilt-free. Whilst this will differ for everyone, below are a few things that your kids could do with their inheritance.

  1. Save for emergencies - This could be your children’s first chance to have a bit of cash behind them. Money saving experts say that you should aim to have at least three months’ worth of living expenses saved in your bank. This should include things such as rent or mortgage payments, utility bills and any food costs. Three months’ worth of living expenses could give your kids the money cushion they need to keep money worries at bay.
  2. Pay off any debts - Many people struggle with debts that having mounting interest. A lump sum of money is the best possible way to eliminate debts and could give your kids that sense of relief that only comes from crossing off all outstanding balances. Of course, without an emergency savings fund already put aside, it could be easy to fall straight back into debt.
  3. Boosting retirement funds - Preparing for a long retirement can be stressful. Whether your children already have a pension, or another source of retirement income planned, an inheritance might give them the boost they need to take a small part of these stresses away.

SunLife offers a range of straightforward and affordable products including over 50s life insurance, funeral plans, life insurance, equity release, pet insurance, home insurance, car insurance, ISAs and Will writing services.

Here's the information that you need to know about who we are and the other companies that we work with in order to provide our products and services.

Who are SunLife? 

Phoenix Life Limited trades as SunLife and is the provider of the Guaranteed Over 50 Plan, SunLife Insurance and the life insurance policy payment option for Funeral Plans. Phoenix Life Limited’s registered office is at 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 1016269). Phoenix Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is entered on the Financial Services Register (registration no. 110418). As part of SunLife’s commitment to quality service and security, telephone calls may be recorded.

SunLife Limited distributes financial products and services and is a company limited by shares, registered office: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 05460862). SunLife Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (registration no. 769427).

You can contact us by post at SunLife, PO Box 1395, Peterborough, PE2 2TR or by phone on 0800 008 6060.

If you choose to add Funeral Benefit Option to your Guaranteed Over 50 Plan the funeral services are arranged and provided by Dignity Funerals Limited. Dignity Funerals Limited is a company registered in England and Wales No. 00041598. VAT registered No. 486 6081 14. 4 King Edwards Court, King Edwards Square, Sutton Coldfield, West Midlands, B73 6AP. Telephone No. 0121 354 1557. Fax No. 0121 355 808. Part of Dignity plc. A British Company. Dignity is not authorised or regulated for this activity by the Financial Conduct Authority or the Prudential Regulation Authority but is a member of the National Association of Funeral Directors.

Who provides the Funeral Plans?

The funeral services are arranged and provided by Dignity Funerals Ltd which is not authorised or regulated for this activity by the Financial Conduct Authority or the Prudential Regulation Authority but is a member of the National Association of Funeral Directors.

The life insurance policy that pays for your funeral will be provided by Phoenix Life Limited, trading as SunLife.

Who provides My Smarter (ISA)?

My Smarter (ISA) is provided by Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority. Details can be found on the Financial Services register, registration No. 188832. Member of The Investment Association. Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ.

Who provides the Will writing services?

Hugh James is authorised and regulated by the Solicitors Regulation Authority (SRA Number:303202).

The information contained on this website is based on Hugh James' understanding of the law of intestacy in England and Wales only as at April 2014. The law in Scotland and Northern Ireland is significantly different. This is for information purposes and is not intended to be legal advice.

Who provides Family Life Insurance?

SunLife Family Life Insurance is provided by Scottish Friendly Assurance Society Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Details can be found on the Financial Services register (registration number 110002). Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ. 

Who provides SunLife Pet Insurance

SunLife Pet Insurance is arranged and administered by BDML Connect Limited. BDML Connect Limited is authorised and regulated by the Financial Conduct Authority (No. 309140). Registered in England and Wales Number 02785540. Registered Office: 45 Westerham Road, Bessels Green, Sevenoaks, Kent, TN13 2QB.

Who provides SunLife Home Insurance

SunLife Home Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.

Who provides SunLife Car Insurance

SunLife Car Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.