Page 70 • The HERALD • 14th November 2024 v WE’VE BEEN YOUR LOCAL SINCE 1994 v ASK A PROFESSIONAL WILL OUR CHILDREN BE ALRIGHT? (FINANCIALLY) by Michael Osman, Oyster Financial Planning I have written before about the fact the UK are heading for a poorer future. Not in the next 10 years, but maybe 20 and beyond not because of Brexit or the Pandemic but because of the sheer economics caused by the cost of living, property prices and how retirement is funded right now compared to 20, 30, 40 years ago. It used to be the ratio of buying a house compared to your household earnings was a 1:4 (wages to house price) it’s now more like 1:9. Add to this equation the fact that 20, 30, 40 years ago pensions were funded quite o en 100% by your employer, if not 75% or close to it. Now the younger generation (I am thinking 40 and below) have to work, try and buy a more expensive house relatively speaking and then from this reduced disposable income live their life and have one eye on saving for retirement!! Money only stretches so far! With the Autumn Budget due (by the time you read this we will know the changes planned for us all) if the speculation is correct the Chancellor has her eyes planted on the assets, incomes and pensions of the 50 plus age group. For the reasons stated above we are heading for a poorer future for children and grandchildren. Which means there may be a much greater reliance on the older family members to be able to safely transfer some of their wealth to their children to help them in retirement which would counter the ratio above. BUT what happens if inheritance tax goes up, capital gains tax goes up, pensions can’t be passed down outside of your estate tax free for your kids when they will need it most. A tax raid on the wealthier side of the population will reduce their ability to help their younger family members in retirement when because of the ratios above they will need the most help. In our opinion one eye needs to be on the present and the longer term. Taking too much today will hurt our children much more than some may expect. If you want to discuss ways to improve this situation or indeed read this and want to understand the impacts of the Budget changes and how they a ect you and your family, please do get in touch. We are in the village and here to help our local community. Pop in, call 023 8084 8410 or email Michael@ oyster nancialplanning.co.uk Michael Osman, Oyster Financial Planning
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