We often hear about a phenomenon known as the ‘sandwich generation’.
This adult cohort is sandwiched between financial provision for grownup children and time or money commitments for elderly parents.
New research about the state of retirement during the pandemic has supported the sandwich generation theory.
The research from Key found that 2021’s retirees are still financially supporting their families, to the tune of £3,700 a year, on average.
Despite an increasing strain on finances due to the pandemic and cost of living crisis, 34% of newly retired people provide financial support to their families.
On average, the newly retired who provide this financial support give £307 a month to family, with 10% reporting they give more than £500 a month, more than £6,000 a year.
The average retirement income is £21,663 a year, so this financial support to families could eat up around a sixth of the income, creating significant pressures on living costs, especially at this time of such high price inflation.
Reasons for giving money to families vary, with 9% allowing families to live with them rent-free, and 6% providing funding for grandchildren.
6% reported giving cash regularly to help with day-to-day living expenses, and 5% gave money to help cover other essential spending.
Retirees also provide significant support to cover significant costs, whether that be a new car (7%), university (6%) or property deposit (5%).
Women, who typically have a lower retirement income, give more to family members than men, at £318 a month on average compared to £300 for men.
The research found that women are almost twice as likely as men to provide rent-free accommodation to family members.
Will Hale, CEO at Key Later Life Finance, said:
“Juggling your finances as you move between full-time employment and retirement can be a challenge – especially if you are supporting your wider family as well. It is only natural that parents want to help whether it is with time, money or advice but it is important that they remember their own needs as well.
“Retirement should be an opportunity to relax and enjoy the hard work that you have put in over a lifetime. However, your finances can be limited by the practical challenges of having a family, buying a house and living a modest lifestyle while at the same time trying to save into a pension.
“This makes it more important than ever that parents consider all their assets at retirement – including their home – as this will not only allow them to improve their own finances but potentially provide more support to their families.”
For more information, please get in contact with Wells Gibson.