The high number of relationships ending in divorce or separation are putting off families giving money or other financial gifts to their children.
A third of parents say they cancelled plans to give their children a financial boost because they feared their relationship was shaky and that the other partner would walk off with their money if they split up.
Parents told researchers that 12% – one in eight – of relationships had already ended, while another 14% had no confidence that their child would stay with their partner long-term.
The study was carried out by financial firm Investec Wealth & Investment and was triggered by annual statistics that show the winter break leads to a surge in relationship problems.
Peak time for failing relationships
Charity National Family Mediation is braced to receive a flood of 10,000 calls from unsettled couples during January 2017, while solicitors Irwin Mitchell revealed divorce instructions surge by 25% after the seasonal break.
The average cost of breaking up for a couple is more than £70,000, according to recent research.
Besides worries about the stability of relationships, 42% of parents are also concerned that their children and their partners lack the skills to manage their financial affair competently.
Added to that:
- A fifth of parents believe their children would fritter any financial gift on extravagant spending, such as luxury holidays
- 14% feel handing over money or assets would lead to their children not working hard to earn their own money
- 13% were worried that their cash would not pass on to grandchildren or future generations
Shielding wealth
Simon Bashorun, financial planning team leader at the financial firm, said: “In our experience parents may disapprove of their children’s choice of partner but can be reluctant to interfere in case they cause a family rift.
“With divorce rates as they are in the UK, we are seeing increasing numbers of parents looking to protect wealth from leaving the immediate family, particularly if they’re pessimistic about the state of their children’s marriages. This often results in parents favouring small financial gifts over lump sums and in some cases setting up discretionary trusts.”
The result of family worries about children and divorce has led to 17% of parents offering small gifts to help with day-to-day bills and 14% to skip a generation and leave their wealth to grandchildren.
Some (17%) are looking at shielding their wealth with discretionary trusts.
