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focusThe Bank of Mum and Dad is a well-known concept and we all hate to see our children struggle financially, which is why many parents continue to support their children well into adulthood. The type of financial assistance given can take various forms, such as money towards a house deposit or a loan for a car or ongoing support towards rent or bills. While it’s natural to want to help, the hard truth is that it’s important to ensure as far as possible that your plans for your retirement savings remain on course. Otherwise, in the long run, no one wins. Here we look at four key ways to help achieve a sensible outcome that works for everyone.

1. Make sure you understand your own financial situation and your retirement goals

Before you commit funds to help your son or daughter, make sure you’re clear about your monthly budget. What are your regular commitments and your personal retirement goals? As a general rule, you may need to be able to replace at least 70% of your pre-retirement income once you stop work. You may also have plans to travel more, or have a particular home renovation project in mind. It’s important to remember to factor in any potential health costs as well.

2. Sit down with your child and have a frank discussion

If you’re clear about your own commitments and the level of possible support, this sets a good example to your children at a time when they’ll just be learning to manage their own finances. It also gives you an opportunity to set boundaries, clarify expectations and fix timescales. Be specific: is the money to help with a student loan, rent, a mobile phone contract or food bills? The concept of an ‘Independence Fund’ can sometimes work well – a one-off payment to help an adult child as they enter the ‘grown-up world’.

3. An external perspective

Sometimes it helps to involve a third party, such as a professional financial planner, who can offer some valuable objectivity. If everyone sits down and reviews the proposed plan together, it makes it easier for everyone concerned to see the impact the arrangement would have on your finances and retirement savings.

4. Put it in writing

If you do decide to provide financial support to your children, it does no harm to make the arrangement formal. This helps your children to take the arrangement seriously and it gives both you and them something to refer back to in the future. It also sets expectations in terms of any repayments and timeframes. Make sure you review the document regularly and that it remains appropriate.

The bottom line is you need to look after your own finances now to be able to look after theirs in the long run.

Remember, we are here to help so please do not hesitate to contact us regarding your financial planning situation. Reviews are part of our added-value services for our clients.


Barry Fleming & Partners has grown from a tax advisory background into a broader business that encompasses investment management. Both things matter for wealth management, retention and creation. That expertise makes the company strikingly different from others.

This capability allows Barry Fleming and Partners to use its strength in tax advice to take a 360-degree-view of a financial situation to give much broader, more comprehensive advice.

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Barry Fleming & Partners are an independent financial advisor specialising in ISA’s, Pensions, Tax, Trusts, Estate Planning, Inheritance Tax Planning (IHT) and other Financial Planning areas. Please don’t hesitate to call on 01488 608 686 and ask to talk to one of our financial advisors. Alternatively use the contact form on our home page.