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 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.
- 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.
- 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.
- 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.