Advisers are predicting that the cost of living crisis is likely to increase the number of clients seeking to give lump sum cash gifts to adult children, according to Just Group’s 2022 Care Report – the 10th edition of the research series dating back to 2012.
Research among over 200 adviser firms found that over four in 10 (42%) thought the price-squeeze would increase the number of clients looking to give a living inheritance in the short term.
Only 24% thought the cost of living crisis would decrease the number of their clients looking to give a living inheritance.
But two-thirds of those advisers said they would need to challenge some clients wishes. The key reasons for challenging clients were because the gift could leave them short of income in later life (64%), because they don’t have enough to give away (52%), or because they had not considered care costs in later life (37%).
Stephen Lowe, group communications director at retirement specialist Just Group, said: “Understandably, people want to help their children financially, but advisers have an important role managing their clients’ decisions to hand over cash if it could leave them short in the future.
“It could lead to some difficult conversations because future care costs are what could be called a ‘known unknown’ that loom large but are currently impossible to quantify.”
