The report finds that the reluctance to communicate about personal finances across generations, leads to great anxiety in those having to take responsibility for their parents.

New research from Schroders Personal Wealth shows that many UK adults are reluctant to discuss money matters with their family. The data also highlights how this issue affects their wellbeing.

The Schroders Personal Wealth Family and Finances Report, which surveyed 1,000 UK adults aged 60 and above and 1,000 UK adults aged 35 to 59, shows that 19 per cent of the older age group have never spoken to their children about their finances at all. Whilst this is for a number of different reasons:

-- 37 per cent (the majority) say they want their children to be financially independent; 
-- 28 per cent don’t think it’s their children’s business to know about their finances; and 
-- 23 per cent admit that they find discussing their finances an uncomfortable and overwhelming conversation.

The reluctance to have these conversations with family members is resulting in confusion and anxiety.

-- 27 per cent of those aged 35 to 59 state they have no idea what their parents’ plans are for passing on their wealth; 
-- 40 per cent say they have some awareness, but don’t know all the details; and
-- 32 per cent don’t even know who the executor of their parents’ will is.

Despite this, 47 per cent of those over 60 who have a will in place state that their child/children are the executors of their will.

Perhaps more concerning is the effect this is having on respondents’ mental wellbeing, with the report showing a clear anxiety about finances and discussing them with family members. When asked how they felt about managing their parents’ money when they are no longer able to do so:

-- 44 per cent of the younger age group say that they feel worried; 
-- Of the above, 52 per cent are overwhelmed by the thought of managing their parents’ finances; and 
-- 50 per cent are afraid that they might do something wrong.

A lack of financial knowledge also featured in the responses, with 23 per cent admitting that they don’t know anything about finance so they wouldn’t know where to start, and 34 per cent saying they were worried about making decisions that could lose them money.

While drawn from a general group of UK individuals rather than specifically hign net worth individuals, the findings may concern wealth managers and private banks about whether the kind if clients they serve have similar anxieties.

Planning for the future  
The report highlighted that in spite of its importance when planning for the future, many people are still failing to prepare a will.

The anxiety about managing their parents’ financial assets clearly hasn’t translated into the younger age group thinking about getting their own affairs in order:

-- 74 per cent said they do not currently have a will in place; 
-- 17 per cent also said they hadn’t thought about their own inheritance plans and have no intention of doing so.

By virtue of the older age group being very close to, or already in, retirement, it could be expected that the majority would have their estate planning in order. However, the report shows that:

-- 19 per cent do not have a will in place;  
-- 82 per cent (the vast majority) have little or no understanding of inheritance tax; and 
-- 71 per cent don’t have a lasting power of attorney.

Ben Waterhouse, chief client officer at Schroders Personal Wealth, said: “As our research shows, not knowing about or understanding family finances can cause sleepless nights and feelings of being overwhelmed. This is where we truly believe that tackling the taboo of talking to your family about money is a key factor for mental wellbeing. Often, these conversations happen too late, or not at all.”

“We believe more needs to be done to encourage stronger engagement with long-term financial planning, as well as promoting family money discussions. We hope this report highlights some of the reasons why wealth planning and discussions are important, and gives some food for thought on potential solutions,” Waterhouse concluded.