How the benefits of your financial plan go beyond you to your family

A financial plan is rarely focused solely on the person making it. For many, a successful plan also benefits their family.

When setting out your goals as part of your financial plan, your family might feature in them. Perhaps you want your retirement income to be enough so that you can treat them to an annual family weekend away? Or you might want to gift a deposit that will help each of your grandchildren get on the property ladder?

By incorporating family goals into your financial plan, you can take steps to turn them into a reality. 

If you’re hesitant to offer support because you’re worried about how it will affect your long-term finances, using a cashflow model could be valuable.

A cashflow model can give you an idea of how your wealth might change based on the decisions you make. It may ease your worries and give you the confidence you need to expand your financial plan to include your loved ones. 

There are several ways you might support loved ones as part of your financial plan. 

Providing gifts to support your loved ones’ finances now

You may want to support your loved ones immediately. Whether through providing gifts or covering regular expenses on their behalf, it’s an option that your family might welcome, particularly if they’re struggling to manage their short-term expenses.

One of the benefits of gifting during your lifetime is that it could reduce your estate’s Inheritance Tax (IHT) liability. 

In 2025/26, the nil-rate band is £325,000. If the entire value of your estate is below this threshold, no IHT will be payable. Many people can also make use of the residence nil-rate band, which is £175,000 in 2025/26, if they leave their main home to direct descendants. 

If the value of your estate exceeds these thresholds, IHT may be due.

Some gifts are immediately outside of your estate when calculating IHT. As a result, if you want to support loved ones now, you may want to consider using these gifting allowances:

• Up to £3,000 each tax year, known as your “annual exemption” 
• Up to £250 to each person, so long as they have not benefited from another allowance
• £1,000 as a wedding gift, rising to £2,500 and £5,000 for grandchildren or great-grandchildren and children respectively.

Another exemption which could be useful if you want to support loved ones now is regular payments made to another person. You might use this allowance to:

• Pay rent for your child
• Give financial support to cover living costs
• Pay into a savings account for your grandchild.

Payments must be regular and funded from your monthly income after living costs. If you use this allowance to reduce an IHT bill, it’s a good idea to keep a record of the payments.

A financial plan can help you assess how gifts might affect your long-term wealth. So, when you gift a generous sum or commit to regular support, you can do so with confidence. 

Offering gifts that support your family’s long-term goals

Another option is to set money aside for your family to support their long-term goals. 

For instance, you might focus on building a nest egg for your grandchildren to help them through university, buy their first car, or travel the world. 

Incorporating this into your plan helps identify the best way to save, depending on your goals and the beneficiary’s circumstances.

When saving for a child to provide a financial helping hand when they reach adulthood, you might choose a Junior ISA, which they gain access to when they turn 18. Whereas if you were helping your child increase their retirement fund, you might make contributions directly into their pension. 

Incorporating these gifts into your financial plan can also help make them part of your regular outgoings and provide reassurance that you’re still on track to meet your other goals. 

Leaving an inheritance

Receiving an inheritance could change your loved ones’ financial situation and mean they’re more secure.

If leaving assets behind for your family is important to you, it can be a central part of your financial plan. You might earmark a portion of your wealth to leave in your will or set aside particular assets for someone. 

We can help you understand how much you could leave behind for loved ones, and how to do it tax-efficiently.  

Contact us

A good financial plan helps you reach your goals, including those that involve your family, and we can help you. Whether you want to involve your loved ones in planning or build a nest egg to support them long-term, please get in touch.

Please note:

This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

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.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.  

The Financial Conduct Authority does not regulate cashflow modelling, Inheritance Tax planning, or estate planning.