How to talk to your parents about money?

Do you talk about money with your parents? It can feel uncomfortable. But as time goes on—bringing with it the spectre of inheritance tax taking an increasing share—it's becoming an ever more important conversation to have.

Why it's important to talk to your parents about money

This is very much on my mind because, for the first time, I’ll be discussing finances with my parents next week. They’re in their mid-80s, and Dad agreed that it was the right time. Both he and Mum are becoming more forgetful, and we all recognise it's better to have this conversation before it becomes too difficult—or, worse—too late.

It is also a current topic from a broader perspective. HMRC has reported record inheritance tax (IHT) receipts in recent years, and changes announced in the Autumn 2025 Budget are bringing more estates into scope. In particular, the inclusion of pension funds and business assets in IHT calculations means more families need to understand their potential exposure.

How to start a conversation about finances with ageing parents?

So, how do you raise the subject of future finances with your parents in a way that feels appropriate?

One place to start is practical: ask where important financial records are kept, and what accounts, investments, pensions and policies exist. The aim is not to take control; it's to make sure nothing is lost or forgotten later. That's the conversation I'll be having with my parents next week.

What financial information should parents share?

It can help to make a simple list of the information that may be needed in future: bank and savings accounts, investments, pensions, insurance policies, property details, regular bills and the location of important documents.

You don't need every detail immediately. The important thing is to begin the conversation and make sure there's a clear picture of where everything is held.

Lasting powers of attorney, inheritance tax and care costs

Another approach is to start by checking whether they have lasting powers of attorney in place. You could also ask whether they have considered the potential effect of the recent inheritance tax changes, or whether they know roughly how much IHT their estate might incur.

It may also be appropriate to talk about later-life care costs. These can have a significant effect on future finances and on the legacy a family expects to leave.

How to estimate inheritance tax and future care costs?

If your parents may be exposed to inheritance tax or later-life care costs, but are unsure of how much or what to do about it, a useful first step is to estimate the legacy they may leave and any possible IHT liability.

You can make a basic estimate using research and a spreadsheet. However, a financial planning tool that accounts for future income, living costs, care costs and taxes can provide a more complete picture. It can also model different possible futures, including changing care needs and a longer-than-expected lifespan.

Using financial planning tools to plan your parents’ legacy

For smaller IHT liabilities, this kind of planning can help shape a gifting strategy that balances short-term income needs and capital gains tax considerations against the potential reduction in inheritance tax available through gifting.

A planning tool can also help families understand the trade-offs before making decisions, rather than simply focusing on the inheritance tax bill.

When to seek financial advice about inheritance tax?

If the potential IHT liability is more substantial, or your parents’ finances are more complex, making your own initial estimate can help inform a decision to engage a financial adviser to make broader plans. In addition, having a clearer financial projection beforehand can make conversations with an adviser more focused and productive, and give a better view of the potential value an adviser could add.

Talking to your parents about money: the first step

So, which planning tool should you use? The MyFinanceFuture Planner includes the financial projections and tax calculations needed, including both IHT and CGT as well as projections for lifetime income, income tax and spending so you can understand the trade-offs. So the MyFinanceFuture Planner is what I'll be using, and I’m looking forward to introducing it to my parents next week.

How about you? Have you had this conversation with your parents? If so, how did you approach it?