This article was originally published on Juno Wealth’s website. Juno Wealth was acquired by Progeny in February 2019.

With Christmas nearly upon us, it’s a wonderful time of year to look forward to spending time with loved ones and family. Cosy fires, tables groaning with food, the frenzy of children unwrapping presents and lots of laughter is what many of us are hoping for this Christmas. Who knows, maybe even a little snow!

But whilst we share that vision and certainly don’t want to put a dampener on the Christmas spirit, there is no denying that the season of goodwill comes with a hefty price tag. A price tag that recent research would suggest is being shouldered to a large extent, by grandparents.

How much is Christmas costing you?

The Centre for the Modern Family is a think tank set up by Scottish Widows to explore and investigate the challenges faced by the modern family. They’ve just produced an illuminating report into the cost to grandparents of supporting their families both at Christmas and during the rest of the year. The results make for interesting reading:

  • 15% of grandparents regularly help their children throughout the year to meet their basic household living expenses, contributing on average £2,200 per year.
  • 43% of grandparents help support their families financially at Christmas, spending a staggering £932 million! That includes paying £400 towards gifts and another £140 towards other expenditures.

As grandparents, most of us don’t begrudge supporting our families at any time of the year, but the Centre for the Modern Family report goes on to reveal some very worrying statistics about the impact this level of contribution has on grandparents themselves.

How much do you sacrifice to save Christmas?

According to the report, 36% of grandparents who help contribute towards the cost of their family’s Christmas, have to make sacrifices themselves in order to do so, with 29% of those feeling more financial pressure each year. The sacrifices made by grandparents include:

  • 32% of grandparents having to sell some of their possessions,
  • 64% having to turn down or off their heating,
  • 66% having to cut down on their food shopping, and
  • 79% having to dip into their savings.

The result is that more than half (53%) of contributing grandparents feel under financial stress in their retirement, with 14% saying that this financial stress is a direct result of supporting their children and grandchildren.

Finally, and perhaps most worryingly of all, 85% of grandparents who contribute to supporting their children and grandchildren do not make provision for these outgoings. It makes sobering reading and suddenly the image of grandchildren ripping open presents by a table groaning with food is brought into sharp perspective.

Time for a rethink?

If any of the above resonates with you, then it’s probably time for a rethink about your finances and the contribution you make to support your loved ones. But that doesn’t necessarily mean that you have to stop helping them, far from it. The key to achieving the perfect balance between enjoying a stress free and financially comfortable retirement and still supporting your family, is in the planning.

Start the new year with a strategic financial plan

It’s very easy to neglect your financial plan. Perhaps you had one at the beginning of your retirement, but you haven’t checked in with it for a while. Or perhaps your plan never really amounted to much more than having an idea of your annual income and the value of your assets.

Enjoy the retirement you want and still support your family

If that sounds too good to be true it isn’t. At Progeny, we believe that at the very heart of a successful and secure retirement is a detailed financial plan which includes life planning. By that we mean, identifying and providing for those things that you want or want to do and that will make your retirement a fulfilled one. And that may well include supporting your family as well as enjoying travel and a pleasant standard of living.

Structure your finances to support your life plan

Once the life planning part of your retirement has been clarified, your finances can be structured in order to support those plans, providing enough income for all your outgoings. And that should mean that come Christmas, you don’t have to make personal sacrifices in order to support the ones you love. In fact, there may well be ways that you can save and or support you family in a way that is more tax efficient and beneficial to everybody in the long term, thereby easing the financial burden all round.

Financial insights so you know what you can afford

What’s more, with our cash flow analysis tools, if a sudden and unexpected expenditure comes up, we can check in with your finances to see whether you can afford it and what sort of impact it’s going to have on your financial situation in the short and long term. The good news is, that very often, if you have a sensible financial plan in place, you may well be able to afford an unexpected expenditure without having to make any personal sacrifices.

All kept under review

Of course, things change, whether that’s your circumstances or that of your children or grandchildren, which is why it’s so important to keep your financial and life plan under regular review. If that all sounds like a lot of hard work, it isn’t. We find that clients really enjoy the life planning part of the financial planning process and find it quite cathartic. And our sensible and evidence based financial plans are kept under review by us, giving you real peace of mind.

All of which means, you should be able to look forward to spending Christmas with your family without having to make cut backs or sacrifices and without worrying about where it will leave you come the new year. And that should mean a very happy Christmas and an even better New Year!

This article is distributed for educational purposes and should not be considered investment advice or an offer of any security for sale. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.

Past performance is not indicative of future results and the value of investments can fall as well as rise. No representation is made that the stated results will be replicated.

Tracey Evans

Associate Director, Wealth

Tracey is passionate about helping clients to see their ‘big picture’ and has been doing so for nearly 30 years.

Learn more about Tracey Evans