Dealing With Family Finances

There are many families in the UK who are coping with the dual headache of adult children who are still living at home or studying at University and parents who are becoming elderly and need support with their health and financial situation. It can sometimes seem as if you’re constantly juggling conflicting demands, but some careful financial planning and handy legal tools can make life easier for everyone.

License: Creative Commons image source
License: Creative Commons image source

Student Finance

Although fees are charged for most University courses in England, there is no demand for payment upfront and the repayments only begin when the student starts earning a set amount. However, the cost of supporting a student also means paying for accommodation, food and books. The obvious solution is to encourage your child to apply for a University close to home to cut the rent costs and insist they get a part time job to help pay for their social life rather than expecting Mum and Dad to fund it all. University accommodation is not always the cheapest option, so check out landlords in the private rented sector too.

House Deposits

Gone are the days of 100% mortgages and more and more young people are turning to their parents for help with the large chunk of money which they need as a down payment. If cashing in assets to help out the kids isn’t an option, offer instead to act as guarantor on their mortgage payments which may allow them to borrow more, or at a better rate than without your financial backing. Also try to educate them in the value of saving and being frugal from an early age.

Pensions and Benefits

Many elderly people are scared and confused by the benefits system, and it is estimated that a staggering £4.5 billion goes unclaimed each year. Pensioners can be entitled to a range of benefits such as pension credit and heating allowance, so if you have an elderly relative who you suspect isn’t getting everything they are entitled to, set aside an afternoon to go through the paperwork with them and convince them to set aside their reluctance to claim. It can also be beneficial to organise an appointment with a financial advisor or a lawyer to discuss issues like will making, inheritance tax and plans for financing any future care which may be needed. It goes without saying that discussions of these sorts have to be handled with sensitivity and care.

Power of Attorney

Legislation surrounding power of attorney changed in the last decade, and many older people are unaware how to get power of attorney or in which situations it can be used. There are now two sorts of powers of attorney, one covering finances and the other concerning health and wellbeing. Older people should be helped to think through the process of how to get power of attorney and who they most trust to manage their affairs if they are no longer able to do so. A power of attorney is a legally binding document which gives the nominated person power to sell property or make decisions about medical care, so rather than reading about how to get power of attorney online, consult a specialist lawyer who can explain all the conditions and options thoroughly.

Residential Care

If the time comes when elderly relatives have to move into a care home, there is often worry about how to meet the cost. In some cases the NHS will meet the cost, in other cases the family will have to meet all or part of the cost themselves. This area is very complex and legislation is constantly changing, so always take professional advice without making any decisions.

About the Author: Freelance writer Paula Whately keeps abreast of financial matters affecting families such as how to get power of attorney, student finance and mortgages.

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