Everyone wants the best for their family, and most people would go out of their way to ensure their loved ones are safe and happy, but when it comes to financial decisions there is a distinct lack of communication.
Financial talk within the family seems to be a taboo subject, with millions of over 55s failing to include their family in decisions about their retirement income, according to Aviva's latest Real Retirement Report.
It seems that many of us are brushing important financial decisions under the carpet with 28% of those with family saying they've not had a conversation with their loved ones about their retirement finances. A further 64% say they have revealed their financial retirement plans to their spouse, but only 20% say they have updated both spouse and family on their plans.
At a time when the Government is handing over more control to individuals on how they take their retirement income, the reluctance to discuss important financial decisions could be putting people at a disadvantage. There is a lack of planning when it comes to people's estates with many failing to protect loved ones by not putting a will in place.
Leaving an inheritance is often high on the list of people's financial priorities as they want to ensure those they are close to will be ok should the worst happen, and 37% of those questioned claimed this was important to them – yet only 59% of these people have put a will in place. No one likes talking about these kinds of matters, but if you take a bit of time to put plans in place, the peace of mind you get will be worth it.
As might be expected, family is important with 42% of those surveyed wanting to ensuring they have enough financial wealth in retirement to be able to help children and grandchildren, but only 22% have chosen options that provide some income to their spouse should they pass away. Lack of income seems to be a barrier to supporting the family, with 15% saying they simply cannot afford to.
Even if it is a struggle to put the right amount away, there should be nothing getting in the way when it comes to discussing the matter. But people have difficulty in doing this too, with 51% feeling it is a personal matter and a further 25% saying they don't even have a full view of their own finances, let alone talking about it to other family members.
This is where the guidance the Government is offering could come into play with 21% of people wanting assistance on how to make the most of their retirement income. Guidance on preparing for the possibility of long-term care is a factor for 18%, while the family tends to come lower down in priorities with only 5% looking for guidance on how they can protect their families through their retirement choices.
Clive Bolton, managing director of retirement solutions at Aviva, said:
"Retirement planning has many benefits including offering the opportunity to maximise income from savings and investments, and achieving the lifestyle you want for yourself and your family.
"With the changes to retirement income announced in this year's Budget, retirees are going to have far more freedom and choice in how they use their savings, and it's important they consider all eventualities, including the needs of their family. It is a matter of finding the right solutions with the help of professional guidance and having open conversations with everyone who could be affected by the choices made at retirement."
Clearly people care about their families, but when it comes to money matters it seems the importance of active communication and financial planning is overlooked. Perhaps people need to get over their shyness about discussing money with the family, or it may just be a case of getting some guidance on where to start, but ensuring you have the correct plans in place for everyone can mean a happy retirement for yourself and a secure future for your loved ones.
There are many savings accounts for you and your family – think about ISAs, junior ISAs, regular savings and children's savings
Look into annuities as a retirement option to give a guaranteed income
Consider health insurance and life cover to keep you and your family safe
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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