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Bank of Mum and Dad needs legal and financial advice – Key

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  • 17/08/2018
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Around half of over-55 parents need legal advice about gifting money to their children but are worried about the cost, data showed.

 

More than three quarters of over-55 parents find gifting rules complicated and are concerned about making mistakes, according to the latest research from equity release adviser Key.

 

Bank of Mum and Dad seeks guidance

Key’s research indicated that two-fifth of parents aged over 55 want more guidance and 78% would welcome tax incentives for gifting to children –  providing the money is used for major life events, such as a first property purchase, university fees or to clear debt.

 

Younger generations concern about parents

Nearly half of those 18-40 year olds living in rented accommodation worry that their parents potentially don’t have sufficient financial knowledge to make the right decisions and are concerned about a lack of support to help their parents’ get it right.

Indeed, over three-quarters of those in rented accommodation want more done to assist the Bank of Mum and Dad (BOMAD) with specific online information and guidance.

Dean Mirfin, chief product officer at Key, said: “Collectively BOMAD is a major UK financial institution but one that needs advice and guidance so that parents feel empowered to make the right financial decisions for themselves and for the next generations.

“Older homeowners in the UK own as much as £1trn in housing wealth according to our estimates and are also likely to have generated significant pension wealth as well as other retirement savings.

“The challenge for parents wishing to lend or gift money is to decide which assets are the most appropriate and most tax-efficient for gifting. We believe advice is key.

“The over 55s are right to demand increased guidance and support and it’s no surprise that the vast majority would support tax incentives providing the money is used for major life events, such as a first property purchase, university fees or debt repayment.”

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