In the UK the average cost of a wedding was over £23,000 last year, with a quarter of couples spending upwards of £30,000. For parents who plan to make a meaningful contribution, starting to set aside funds early can make the eventual event less stressful. Savings over a longer period will be less of a drain on your income. If you are saving over a 10-year plus period and your attitude to risk and capacity for loss allows, you can invest in higher-growth assets such as equities, which historically have been more likely to deliver higher returns. Stocks and shares ISAs are a good option for those saving over these timeframes. Individuals have a £20,000 annual allowance, and there is no capital gains tax or income tax to pay when you cash them in. As the event draws nearer, consider gradually shifting your savings into lower-risk assets. The last thing you want is a sudden market downturn to disrupt your finances just before the big day. If your timeline is shorter, a cash ISA can be a safer option – just be sure to compare rates to get the best possible return. It helps to set a realistic goal and work backwards – decide what you can afford, then save a monthly amount that fits your timeframe. Wedding spending can easily get out of hand, so let family know your budget before they get carried away looking at venues or planning the guest list. GIFTING AND INHERITANCE TAX Normally we need to live for seven years for cash gifts to be outside of our estates for inheritance tax (IHT) purposes. However weddings and civil partnerships provide the potential for effective IHT planning. Parents can each gift up to £5,000 towards the costs, which will be completely outside of their estate for IHT purposes. Grandparents can also gift up to £2,500 each, with others able to gift £1,000 under the gifting rules. Saving for the big day before your children are in a serious relationship may seem premature or like tempting fate. But starting early can be the most effective way to help them have the celebration they want, whether it’s with confetti and bells or barefoot on a Caribbean beach. And if they decide married bliss is not for them, you will have created a savings pot that can be used elsewhere – perhaps helping towards a first home, further study or boosting your own retirement funds. ✣ Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances. Investments do not offer the same level of capital security as deposit accounts. The value of your investment and the income from it can fall as well as rise and you may not get back the full amount you originally invested. The Financial Conduct Authority does not regulate tax advice. Tax treatment varies according to individual circumstances and is subject to change. 6 Credit: Rawpixel.com/Shutterstock.com Wedding bells and wedding bills The number of UK couples marrying or forming civil partnerships every year has returned to prepandemic levels despite a significant rise in the costs of saying ‘I do’. While traditionally the bride’s parents were expected to pick up the tab for the celebrations, more couples are paying their own way, with around 70% still having help from parents or wider family. SAVINGS A Set a realistic goal and work backwards – decide what you can afford, then save a monthly amount that fits your timeframe and let your family know your budget.
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