Don’t have children? What this can mean for your finances

Published: 28 June 2019

Individuals and couples without children are a growing demographic. Yet it can sometimes feel as though their financial lives are overlooked.

Almost one in five women in England and Wales have no children by age 45, according to the most recent research on the matter by the Office for National Statistics (ONS). It found that of English and Welsh women born in 1946, just 9% did not have children by the age of 45. The proportion doubled among women born in 1971, at 18%1.

Similar patterns are evident in other countries. In the US, for example, one study found that between 2007 and 2012, birth rates among women in their twenties fell more than 15%2.

The trend suggests more and more people are navigating their financial lives without younger dependants to think about. While that might sound appealing in terms of the cost burden, it does call for different thinking when it comes to some aspects of financial planning.

Let’s have a look at some of the implications and some of the issues to consider.

Insurance and protection

It might be assumed that individuals or couples without children don’t need to worry as much about life insurance and other financial protection. But this isn’t necessarily the case.

Life insurance might be less urgent for those without dependent children, but protection policies such as income protection and critical illness may still be priorities. Many couples without children still rely on two incomes and the loss of one of those incomes - whether for a short period or the long-term - could have a severe impact on their standard of living.

Investments and pensions

Someone without children may be tempted to look on their money as being worth more in the present than in the future - after all, there are no dependants for whom to build a nest-egg or make future arrangements.

Long-term savings remain important for those without children though. Remember you may live for 20 or 30 years after retirement. Also you may still have elderly parents in need of financial support. And without any kids of your own to support you in later life you’ll also need to consider what provision you need to make in this area.

Passing money on

When it comes to passing money on there are particular considerations for those who don’t have children, given rules on how your estate would be distributed if you die without a Will (die intestate).

For example, if there are family, friends or perhaps a charity you would particularly like to pass your assets onto, unlike children they would not automatically receive anything if you die intestate. Instead it might go to extended family members or, if there aren’t any, the Crown3.

It’s worth noting too that those without children don’t benefit from the main residence nil rate band. This extends the IHT nil rate band by £125,000 for those who pass their main home to a direct descendent4, but it isn’t available to family members who are not direct descendants.

If you lose capacity

Who would you want to take control of your financial affairs if you lost capacity to make your own decisions? This responsibility is often assumed naturally within families by one of more children or grandchildren.

Where that is not an option, alternatives might include giving a power of attorney to a partner, sibling or a younger relative. But there will be individuals without any family for whom even that isn’t possible. Getting legal and financial advice and putting arrangements in place in advance of any capacity issues potentially arising may be particularly valuable in this instance, to make sure your interests are properly safeguarded.

Long-term care

This is another area in which the onus tends be on younger members of a family to make arrangements or get involved in helping their parents or grandparents at the practical level.

If there aren’t any children or grandchildren, however, you may want to investigate your options for care support and funding well in advance of your needing it. Perhaps, for example, you may be less concerned about using your home to fund it than those with children to inherit it.

It may also be worth exploring what kind of support that any extended family members - such as siblings, cousins, nieces and nephews – would be prepared to provide you with.

If you are not sure what the options are for funding long-term care, the Money Advice Service website could be a good place to start.

While individuals and couples without children may gain in terms of flexibility and disposable income, there is still a need to plan for the long-term, with investments and pensions having a big a role to play.

But when it comes to matters such as passing assets on, securing the right insurance and funding later-life care, the priorities and planning challenges can be quite different.

Important information

This is provided for general information only and takes no account of personal circumstances. It is not a recommendation to buy or sell. It is provided solely to support you in making your own investment decisions. If you have any doubts as to their suitability you should seek expert advice. Alliance Trust Savings does not give financial or investment advice.

Laws and tax rules may change in the future without notice.

Please be aware that the value of investments can fall as well as rise so you could get back less than you invest. Past performance is not a guide to future performance.

1 ONS - Childbearing for women born in different years, England and Wales: 2016 - 22 Nov 2018
2 Urban Institute - Millennial Childbearing and the Recession - April 2015
3 - What if I have no Will? The problem of intestacy - 30 April 2018
4 Low Incomes Tax Reform Group - What is the nil rate band? - 18 May 2019


You may find our Planning for life after work guide a helpful read.

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