{"id":8021,"date":"2026-01-14T12:03:51","date_gmt":"2026-01-14T12:03:51","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/quilter\/?p=8021"},"modified":"2026-01-14T13:13:43","modified_gmt":"2026-01-14T13:13:43","slug":"an-end-to-the-bank-of-mum-and-dad-more-than-one-in-ten-retirees-cutting-back-on-gifting","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/quilter\/2026\/01\/14\/an-end-to-the-bank-of-mum-and-dad-more-than-one-in-ten-retirees-cutting-back-on-gifting\/","title":{"rendered":"An end to the Bank of Mum and Dad? More than one in ten retirees cutting back on gifting"},"content":{"rendered":"
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Gifting can reduce IHT, but poor record-keeping could cause the exemption to be rejected <\/td>Gifts with reservation (e.g. continuing to benefit from gifted assets) often trigger unexpected IHT bills <\/td>With frozen thresholds and pensions joining IHT, careful planning is more important than ever <\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n\n
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According to Quilter\u2019s inaugural Retirement Lifestyle Report, 13% of retirees plan to cut back on gifting to children and grandchildren. This figure rises to 16% among younger retirees with higher-than-average incomes, and 15% among their lower-income peers, suggesting that even those with relatively strong financial positions are cutting back.<\/strong> <\/p>\n<\/div>\n\n

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Retirees play a crucial role in supporting younger generations. The report, based on a survey of 5,001 retirees, shows the average retiree currently spends over \u00a32,500 annually supporting younger family members \u2013 \u00a31,323 in gifts and \u00a31,175 towards education. <\/p>\n<\/div>\n\n

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Many retirees, particularly those with higher incomes, gift well in excess of this average and many are far exceeding the current annual gifting allowance of \u00a33,000. Younger, higher income retirees, for example, gift an average of \u00a34,836 to relatives and a further \u00a35,280 towards education annually. <\/p>\n<\/div>\n\n

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While breaching the annual gifting\u00a0allowance does not automatically\u00a0trigger a tax liability, unless the\u00a0donor dies within seven\u00a0years,\u00a0it\u00a0introduces complexity and uncertainty\u00a0that may discourage more purposeful\u00a0financial support.\u00a0Without action, there is a risk that\u00a0crucial intergenerational wealth\u00a0support may diminish further, which\u00a0would not only have a negative impact\u00a0on younger generations already\u00a0experiencing significant struggles\u00a0themselves, but it would also have\u00a0a knock-on impact on the economy.\u00a0The gifting allowance has\u00a0remained\u00a0frozen for over 40 years and had it\u00a0kept pace with inflation, would now\u00a0sit at \u00a312,000. As such, Quilter is calling\u00a0on the government to modernise the\u00a0annual gifting\u00a0allowance. While it\u00a0recognises a full uprating could be\u00a0unrealistic in the current fiscal\u00a0environment, it is calling for a modest\u00a0increase to at least \u00a39,000 to enable\u00a0families to transfer wealth more flexibly\u00a0and with greater confidence. Even\u00a0though some people are choosing to\u00a0gift less right now, many still find it a\u00a0meaningful way to support family and\u00a0manage their finances effectively. See\u00a0overleaf to learn more about how\u00a0gifting might be a beneficial\u00a0option\u00a0for you right now.\u00a0<\/p>\n<\/div>\n\n

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Shaun Moore, Tax and Financial\u00a0Planning expert at Quilter, says:\u00a0\u201cRetirees provide a vital avenue of<\/em>\u00a0 financial support for younger\u00a0generations, helping with everything\u00a0from education to deposits for first\u00a0homes. If the Bank of Mum and Dad,\u00a0or even the Bank of Gran and\u00a0Grandad, begins to close its doors,\u00a0the ripple effects could be felt across\u00a0the housing market, education\u00a0system\u00a0and the wider economy.<\/em>\u00a0<\/p>\n<\/div>\n\n

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The gifting allowance is a relic of\u00a0a different economic era. Even a\u00a0modest increase to \u00a39,000, for<\/em>\u00a0example, would better reflect modern\u00a0financial realities, ensure it aligns\u00a0with existing savings vehicles such\u00a0as the Junior ISA, and could allow\u00a0families to support one another\u00a0more freely and purposefully.\u00a0<\/em>\u00a0<\/p>\n<\/div>\n\n

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The rumour mill is already in overdrive as we near the Chancellor\u2019s upcoming Budget and has so far seen a potential lifetime cap on gifting, an extension to the period donors must live after making a gift before it falls outside of their estate for IHT purposes, and the potential for a further freeze on the nil rate band all debated. While none have been confirmed, the government will clearly be trying to fill a hole in its finances. However, any reform in this area must ensure families can continue to provide support without fear that normal acts of generosity will be swept into the IHT net. Any review of gifting rules should be considered alongside the outdated gifting allowances. <\/em> <\/p>\n<\/div>\n\n

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A modernised allowance would support financial planning, reduce reliance on the state and help unlock economic potential. With pensions soon falling within the IHT net, generating a considerable uplift in revenue, this reform would be a modest concession for a meaningful economic gain. If the government\u2019s goal is to foster a high-growth, investment-led economy, then reducing friction around intergenerational wealth transfer is not just aligned with that vision, it is essential to it.\u201d<\/em> <\/p>\n<\/div>\n\n

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It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.<\/em><\/strong> <\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

Gifting can reduce IHT, but poor record-keeping could cause the exemption to be rejected  Gifts with reservation (e.g. continuing to benefit from gifted assets) often trigger unexpected IHT bills  With frozen thresholds and pensions joining IHT, careful planning is more important than ever  According to Quilter\u2019s inaugural Retirement Lifestyle Report, 13% of retirees plan to cut back […]<\/p>\n","protected":false},"author":4,"featured_media":8022,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,77],"tags":[],"hd_content_source":[],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts\/8021"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/comments?post=8021"}],"version-history":[{"count":8,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts\/8021\/revisions"}],"predecessor-version":[{"id":8051,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts\/8021\/revisions\/8051"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/media\/8022"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/media?parent=8021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/categories?post=8021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/tags?post=8021"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/hd_content_source?post=8021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}