Why do some parents choose savings over helping adult children?

[Perthgirl]

My Mum is a 86 year old widow has just received a HMRC self-assessment to complete. My father died 3 years ago and all of their ‘joint’ money became her money. She didn't want to pay an accountant to help with her self-assessment and asked me to help.
I have mentioned previously that she would need to complete a self-assessment but this fell on deaf ears as ‘no-one has asked me for it’.
She lives in a £700k very nice house and manages well on her own. She is fit, well and active.
We get on well and I think I am a very loving and supportive daughter. I have never received any financial support from my parents since leaving home at 19.
It transpires that she has over £500,000 in ISAs, Premium Bonds, numerous building society savings accounts. All building society accounts have the £85k IFA protected amount/limit.
My husband and I are 59 and 60, both work full time and have 3 children (triplets) in final year of university. When I did a rough calculation on what £££ she might owe, her comment was oh ‘I might not be able to afford to give the children their £50 Christmas money this year, as I will have a large tax bill’.
It is her money and she is entitled to do what she pleases, etc. She enjoys a very comfortable life, with 3 overseas holiday each year and a busy social life.
She has previously said that she has so much money coming in that she does not know what to do with it. My Dad had a very good state funded pension which she still receives. When I suggested that she might like to help the grandchildren through Uni, she said, well no, as I do not know when I might need the money for myself!
Why would some parents/grandparents choose to pay £1000s to the tax man rather than possibly help the family?
I realise that she may need to fund a care home at some later stage, but £700k + £500k = £1.2M.
Can anyone help me understand?

Who said anything about uni costs? And even if that was the case, what a miserly way to look at life - “I didn’t have X so I won’t support anyone else to have it.” Thank god the rest of society doesn’t think like that or women wouldn’t even have the vote.

You are literally making my point. Literally.

She has half a million pounds in cash and savings bonds. That's an enormous amount of money. Yes she might spend it all on care. But it's still an enormous amount of money.

That’s what some are like, though!

£22k income from investments, plus say £10k state pension, plus say £10k from husband's pension is £42k. There's no way she needs that much for "expenses" especially if she owns her home, presumably no mortgage, and no sign from the OP of an extravagent lifestyle. In fact, pretty sure, I saw them mention that some of the income was being saved. My experience of advising on IHT planning and dealing with HMRC (I'm an accountant) is that HMRC wouldn't have any issue with an "income" of over around £20k or so, with the excess being "gifted" as long as the typical/average annual spending were £20k or less, which is pretty normal for older people who aren't paying rent nor a mortgage and aren't going on regular cruises or expensive foreign holidays or buying a brand new car every few years. If the spending patterns (backed up by bank statements etc) show average spending of less than average income, the difference is fair game to be gifted at whatever age. To an extent the actual amounts don't matter in total, it's the difference between income and expenses that is the determining factor. Whether that's income of £10k and spending of £5k or income of £50k and spending of £45k - the "difference" for gifting is the same £5k. But in reality, HMRC wouldn't even bother to ask about relatively small "gifts out of income" in the range of up to £10k or so if the income (pensions plus other investment income) was say £20k plus. They're only looking at much bigger sums. Get your ducks in a row, get the "evidence" of income against expenses and you're good to go.

I feel like I am I the only one that is a lot better off than her parent and, as far as they are concerned, should be treating them.

No I'm not. People are still poor. There are still people who are struggling. And, during the whole time that I worked in the public sector I met many people who were doing just that. I used to say that many people are 2 wage packets from disaster. They have no savings, no buffer, if a disaster strikes they rob Peter to pay Paul. They don't have rich relatives who can bail them out. They get into debt and are on a downward spiral. Those who earn huge salaries, have savings, don't know how the other half live.

My cousin and his wife had live in carers for 18 months, then for him alone, after she died for nearly 3 years, I estimate that would have blown over £600k but it meant that he could live in his own house and had exemplary care. He earned that money, how he chose to spend it was his decision. As usual on MN people are very willing to spend other peoples money, either their relatives or the taxpayers.

Yes, who arranged the funeral, who looked into their left over bank accounts? You were never contacted?

No, I have the same with my dm who spends all of her money on lunches out and has no savings. She can do as she likes with her money. I have made sure I have paid into a decent pension.

And again, for a good 40-odd years, poor people were better supported by the government. Better than poor people are supported today or will be supported in the generations to come.

I never said poor people did not exist.

I'm not sure why you think I was never contacted? And contacted by whom? I have been deeply involved in everything family related. I'm the one who has taken care of all my late parents' legal and financial affairs.

It did sound to me you were left out of everything they ever did because you never got any help from them but your two siblings got everything including the house

Mine has 50k in premium bonds but has a shared equity house so has to pay "rent" out of her income - her choice, she wanted a bigger house. I don't want her money - I would feel infantilsed (my issue!).

No, I wasn't left out of anything. I simply never asked my parents for money because I didn't think it was up to them to support me. But I was very close to them and miss them both terribly. The house situation is what it is. I have one-third ownership on paper, but as I explained, the reality is that my siblings live there and probably will continue to live there for the rest of their lives.

She can use the £3k per recipient small gifts exemption every year until the day she dies without incurring an IHT liability. Why would HMRC investigate that? It’s just normal tax planning.

Thank you for replying, wishing you the best.

@Badbadbunny
£22k income from investments, plus say £10k state pension, plus say £10k from husband's pension is £42k

An 86yr old with an inherited state pension from her husband is not going to also get the basic or the over 80 or the new state pension on top. In fact, she will have been 76 when you could start earning NICs towards the new state pension in 2016, no idea why a self-professed accountant would even consider adding in £10k for new state pension.

So not bloody likely she is getting a total state pension income of £20k/yr because you can’t double dip like that. Re-read the OP, she didn’t inherit a private pension, but has an inherited state pension from her husband.

You also forgot to list income net of taxes and consider the impact of inflation and decreasing mobility on spending to maintain her current lifestyle, including living in her £700k home.

It’s tricky. My own mum went without sns managed to leave us money when she passed and help us lots when alive. Mum was 92 when she passed and always treated me and bother the same. She may feel very vulnerable and want to store some back for decent care in her home or medical treatment but the comment about a mere £50 seems off. I wonder if there is some mental health deterioration. Ditto the comments earlier about she is not having an income per se and has to be self sufficient. Some parents feel they have done enough when their child reaches 18. It is a modern thing to see higher prevalence of expectancy surrounding gifting and money transfers, I sympathise with your sentiment but perhaps the reasoning of your mum is not what you think. Best to see what unfolds and work out the tax obligations etc and deal with that first. Good luck with it all and I hope it works out.

The gifting from regular income exemption from IHT is completely different from the £3k gift allowance per year. The £3k gift allowance is in total for all recipients per year, it isn’t per person per year.

I have been reading the thread and still cannot form an opinion. My parents left everything to my brother because he is abroad and cares for them, well, kind of ...so I had to make peace with it. My mother in law is keeping her POA secret from her two sons, both her and her husband have cancers, they are in their 80s. If any inheritance, my husband might wait for it....

but it will sting me if my parents had so much and never spent even 10 pounds on my daughter because they never did, I imagine if they had almost a million sitting there and all they thought was their sorry miserable arses ....

This.

And thats me being polite.

The best you can do is make sure you are nothing like her.

She has a 66% chance of surviving to 90 but only a 5% chance of making it to 100.

Oh gosh that is a sad state of affairs. My gent has had a full and lively life, provably out right now socialising while I'm looking forward to bed!
His garden in contrast is absolutely beautiful, like a woodland but v much tended to and these days does pay someone to do that.
But he deserves and could say for double glaze windows at this time of his life! I know he wears a few coats when inside.

Nope, not the only one!