Important planning tips if you want to support family members during your retirement

It is admirable to want to support your children financially, even once you’ve stopped working yourself.

This might involve helping them:

Pay for everyday costs
Get onto the property ladder
Fund higher education

This support can be incredibly rewarding, but it’s also important to consider how much you can realistically afford to give without affecting your own long-term financial security.

According to IFA Magazine, 61% of parents with children over 18 are helping them financially. Yet, 75% of those who provide this support say it has affected them financially.

The same source found that 27% of parents have used some of their savings, while 18% are saving less for their long-term needs.

Even more worrying, 15% have either delayed retirement or expect to live a more modest lifestyle due to the support they provide.

Read on to learn three important tips if you wish to support family members during your retirement.

1. Factor regular support into your retirement budget

If you help an adult child with rent, bills, or childcare costs, it can be easy to overlook these small, regular payments.

On their own, they might not feel as though they have much of an effect on your budget. However, over the course of a year, they can turn into significant outgoings.

For instance, if you give a child £300 a month, this will cost you £3,600 each year. Over five years, this would amount to £18,000.

If you don’t think carefully about these payments, it can become harder to understand how much you’re actually spending.

You may find that your savings deplete much more quickly than you expected, or that you need to draw more from your retirement fund than originally planned.

This could create significant shortfalls later, affecting your ability to maintain your standard of living during the next phase of your life.

This is why it’s so important to include family support as part of your retirement budget.

Doing so means you can see exactly how much you’re giving and whether this is still sustainable alongside your own lifestyle.

2. Plan for larger outgoings ahead of time

You may also want to provide larger, one-off gifts to adult children during your retirement. This could include helping them with:

A house deposit
Wedding costs
Starting a business

These gifts can undoubtedly make a meaningful difference, especially if they’re just getting started with their adult lives.

But they can also place considerable pressure on your finances if you don’t plan for them well in advance.

For instance, withdrawing a large amount of money from your pension to help with a house deposit could increase your Income Tax bill if it inadvertently pushes you into a higher tax band.

Or, selling investments during a period of volatility could crystallise losses, leaving you with a shortfall later in life.

Even if you have enough accessible money to make the gift today, it’s still vital to consider how it might affect your retirement plans in the future.

Cashflow planning can model your income, assets, spending, and planned gifts, showing how larger outgoings might affect your retirement over time.

This could help you understand whether a gift is realistically affordable, whether you should make it in one go or gradually, and if you need to adjust your plans to maintain your desired retirement lifestyle.

What’s more, planning ahead can give you the time needed to build wealth accordingly. If you know you’d like to help a child with a house deposit in five years, you can start setting money aside now rather than making a withdrawal later that might disrupt your retirement.

3. Understand the tax implications

Gifting can also have significant Inheritance Tax (IHT) implications, and there are several allowances and exemptions available.

As of 2026/27, your annual gifting exemption allows you to give away up to £3,000 each tax year. If you didn’t use this in the previous year, you may be able to carry it forward to the next.

You can also make small gifts of up to £250 to as many people as you’d like, provided you haven’t used another exemption for the same person.

There are also specific exemptions for weddings or civil partnerships, depending on your relationship to the couple.

You can usually give up to:

£5,000 to a child
£2,500 to a grandchild
£1,000 to anyone else.

Gifts in excess of these allowances might also be treated as “potentially exempt transfers”, which usually fall outside your estate for IHT purposes if you survive for seven years after making them.

If you do die within seven years, the rate of IHT is usually measured on a sliding scale known as taper relief.

“Gifting from income” rules also allow you to make potentially unlimited gifts without them being counted as part of your estate.

However, they must be regular, made from your income rather than savings or investments, and they can’t affect your standard of living.

Clearly understanding these rules before making a gift could allow you to support your loved ones in a tax-efficient way.

Get in touch

We could help you understand how much support you can realistically afford and how gifting might affect your retirement income.

Please contact us at hello@ardentuk.com or call or WhatsApp us on 01904 655 330. As an award-winning financial advice company with advisers included in the 2025 VouchedFor Top Rated guide, we can assure you that we’re a bona fide company providing excellent advice and high-quality service.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals 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.

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 estate planning, cashflow planning, or tax planning.