One of the key advantages of achieving financial security is that you can help your loved ones. As well as reaching your own goals, you can support your family in living the life they aspire to.
However, in some cases, financial support could turn into financial strain.
Read on to learn more.
Bank of family lending is increasing but only 1 in 4 take financial advice before making a gift
As house prices and the cost of living rise, UK adults are increasingly relying on family support to reach important financial milestones, such as buying their first home.
Research from Legal & General found that, in 2024, families supported 42% of home purchases made by people under 55. Overall bank of family lending had increased by 69% in the past four years.
The figures also showed that around half of parents and grandparents used cash savings to help out their family members, but a concerning 12% were accessing their pension savings to make gifts.
Crucially, only one in four people who gave money to family members sought financial advice before doing so.
Consequently, many people could be passing large sums to their loved ones without carefully considering how this might affect their own situation now and in the future.
More than half of UK adults expect to financially support their retired parents
While the level of support needed may have increased, there is nothing new about parents helping their children financially. However, this trend is reversing, and many parents rely on their adult children to help them fund retirement.
A study from Aegon revealed that 55% of adults with living parents expect to support their parents financially in retirement. Additionally, many adult children cover expenses for their parents, with 38% paying for meals out and 25% paying towards regular bills.
Over time, these costs can add up to a significant amount of wealth. More importantly, you may be diverting funds away from your own savings and investments to support loved ones.
In time, this could mean you fall behind with your savings and face a notable shortfall when you reach retirement.
38% of adults believe they will have to provide unpaid carer support
As well as contributing to regular costs during retirement, many UK adults face the prospect of helping their parents manage later-life care, should they fall ill.
This might involve helping them cover the cost of care, which can be incredibly high. The UK government reports that the average cost of residential care rose to £1,185.55 in 2025 – an increase of 7% on the previous year.
The local authority only offers support with care costs once a person’s assets fall below the upper capital limit (UCL) of £23,250. As such, you or your parents may need to cover these expenses personally.
To manage this and potentially reduce the cost, many people plan to care for their parents themselves. The Institute and Faculty of Actuaries (IoFA) reports that 38% of people expect to provide unpaid carer support, and 25% of current carers give more than 40 hours a week.
This is a significant amount of time to dedicate, and could make it more difficult to maintain a successful career. In the long term, this may affect your own ability to build wealth for the future. There may also be additional costs to bear if you move an elderly parent into your home.
4 tips to help you support your loved ones without sacrificing your own goals
Helping your family members financially may be important to you, but it is sensible to consider how this might affect your own plans. Here are four tips to help you offer support while also reaching your own goals.
1. Have open conversations with your parents about care costs
A lack of planning could mean you suddenly have to find large sums of money to cover care costs. However, if you prepare for this eventuality as a family, you may be better placed to absorb this expense.
Have an open conversation with your parents about their situation and whether they have adequate savings to pay for care. If not, you can discuss ways for them to build their savings now. You can also get an idea of what you might need to contribute if they’re unable to cover the cost themselves.
Putting a plan in place could mean you’re more likely to manage this expense without using wealth you intended for other purposes, such as funding your retirement.
2. Budget for any support you offer to loved ones
It’s easy to lose track of funds you use to support your family’s regular expenses. If you’re helping out with bills or buying meals occasionally, you might not realise just how much you’re spending. However, you could erode your disposable income and sacrifice your savings.
To avoid this, sit down and review your budget to see how much you can realistically afford to give to loved ones each month, while maintaining your own contributions to savings and investments.
This allows you to help your family sustainably without sacrificing your own future.
3. Explore benefits and state support for elderly parents
Your elderly parents may be entitled to certain benefits and state support to help with their living costs. This might include:
- Pension credit
- Council Tax reductions
- NHS-funded care
- Attendance Allowance (for those with a disability or illness).
Applying for these benefits could reduce the amount that you need to contribute to caring for your elderly parents.
4. Discuss gifts with a financial planner before making them
There are many important factors to consider when gifting large sums, perhaps to help with a house deposit or care costs.
For example, you may want to think about:
- If you need the savings for any other purpose
- Where you will take the wealth from
- How quickly you can replace the savings
- The tax implications of the gift.
These are all questions that a financial planner can help you answer. We can also use cashflow planning to model the potential impact a large gift could have on your future finances.
With our support, you can be sure that you won’t disrupt your own financial plan by helping your family. We can also help you find the most tax-efficient ways to pass on wealth.
Get in touch
We can help you explore the most effective ways to help your loved ones financially without sacrificing your own goals.
Please get in touch to find out how our team of VouchedFor Top Rated planners could help today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
The Financial Conduct Authority does not regulate estate planning, cashflow planning or tax planning.