1. Essential Personal Finance
Chapter 11
Help from your family
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

2. Contents Introduction Teaching you to fish! Investments for children
Cash flow
Saving habit
Budding entrepreneurs
Investments for children
Help buying a home
Gifts and bequests
Inheritance
Trusts
Conclusions
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

3. Introduction Financial education Help with housing
Savings and investments
Gifts and bequests
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

4. Teaching you to fish! Financial education Help with housing
Savings and investments
Gifts and bequests
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

5. Cash flow Figure 11.1 An example of cash flow during your working life
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

6. Cash flow tips ? ? ? ? ? ?
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

7. Cash flow tips Standing orders and direct debits for bills
Use a cash flow app
Cut non-essential spending
Check balance before you buy
Save rather than borrow
Only borrow to increase future resources
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

8. Saving habit Pay yourself first Standing order to savings account
Make targets concrete – size, timescale
Set milestones (mini-targets)
Share your goal
Review regularly and switch for best returns
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

9. Saving habit: concrete goals
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

10. Young entrepreneurs Business structure Taxes School initiatives
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

11. Investments for children
Financial education
Help with housing
Savings and investments
Gifts and bequests
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

12. Investments for children
Savings product – saving habit, money management
Tax-favoured savings and investments (tax wrappers)
But children might not be taxpayers anyway
Gifts from parents – UK anti-avoidance rules
Investment term – risk and return
Asset-based welfare – social mobility
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

13. Help buying a home Financial education Help with housing
Savings and investments
Gifts and bequests
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

14. Help buying a home Help with mortgage Help with deposit ? ? ? ? ? ?
Other help ?
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

15. Help buying a home Help with mortgage Help with deposit Other help
Gift: lump sum
Guarantor
Gift: regular
Family offset mortgage
Loan
Other family savings deposit
Other help
Pros and cons of each?
Joint ownership
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

16. Gifts and bequests Financial education Help with housing
Savings and investments
Gifts and bequests
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

17. Gifts and bequests: inheritance (UK)
Figure 11.2 Example of how Inheritance Tax works
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

18. Gifts and bequests: trusts? ? ? ?
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

19. Gifts and bequests: trusts
Trustees
Trust
Settlor
Why use a trust?
Beneficiaries
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne

20. Conclusions
Types of help – financial education, homebuying, savings and investments, gifts and bequests
Teach to fish (education)
Cash flow – goal setting and planning over your life course
Saving habit – set goals, prioritise, automate, commit by sharing, review
Entrepreneurs – internet businesses, school initiatives, business structure and taxes
Savings and investments – special schemes for children, tax (children usually non-taxpayers anyway), long-term so capital risk OK
Help buying a home
Deposit (gifts and loans)
Mortgage (guarantor, family offset mortgages and similar)
Other (joint ownership)
Gifts and bequests – UK Inheritance Tax (7-year rolling gifts total, nil-rate band, many lifetime gifts tax-free)
© 2017 Lien Luu, Jonquil Lowe, Jason Butler and Tony Byrne