Marsden Building Society reveals hidden costs of retirement
Retirees are dipping into pensions and savings to support children and grandchildren, with one in three worried about being left financially vulnerable.*
Key findings:
84% of retirees have financially supported an adult child or grandchild in the last 12 months
35% provide financial support regularly
44% have given £2,500 or more over the past year and 25% have given £5,000 or more
35% have taken money from retirement savings or pensions to help family
33% worry helping family could leave them financially vulnerable later in life
71% believe younger generations rely more on family financial support than previous generations
Britain's retirees are financially supporting their families long after leaving the workplace, with new member research from Marsden Building Society revealing that the ‘Bank of Mum and Dad’ remains open into retirement.
The survey of Marsden Building Society members, who are approaching or in retirement, found that more than eight in ten (84%) have provided financial support to an adult child or grandchild over the past year, while more than one third (35%) say they do so regularly.
The scale of the support is also significant. Almost half (44%) of those helping family members gifted at least £2,500 during the last 12 months, whilst a quarter (25%) gave £5,000 or more.
Over one third (35%) admitted they’ve dipped into retirement savings or pension pots in order to help loved ones. More than a quarter (26%) have even cut back on their own lifestyle to keep supporting family members, with holidays emerging as the most common sacrifice.
The findings suggest there’s a growing number of older Britons acting as a financial safety net for younger generations, with 71% of respondents saying they believe younger people depend more heavily on family financial support than previous generations ever did.
Despite concerns about the long-term impact, many retirees feel compelled to help. One respondent said: "I hadn't foreseen this would be necessary, but the economic situation has meant it's essential to provide him with any hope of making his future a success." Another added:"I’m glad that I’m able to help out but wish that I didn't need to."
One respondent felt that “being old is much more comfortable than being young these days”, whilst another felt it was their duty because “it’s more difficult today to get a foot on the housing ladder."
For some, helping family has simply become part of retirement life. "In the present economic climate, high taxation and exorbitant costs of living, if we can help our family, we will,” one retiree said, whilst several others felt family support is something that’s become normalised.
The research also revealed some anxiety among retirees who are helping loved ones, with one-third (33%) worried that supporting family could leave them financially vulnerable in later life.
Many expressed frustration that working younger adults still require family assistance despite being in employment. As one respondent put it: "If they’re working and still struggling, there’s a problem with the system. But I can't just let them struggle."
Commenting on the findings, Rob Pheasey, Chief Executive at Marsden Building Society, said: "Retirement is often viewed as a time to enjoy yourself using the savings built during your working life. However, our findings show that retirees remain a crucial source of financial support for children and grandchildren. While many are happy and willing to help, the fact that more than a third are drawing on retirement savings to do so highlights the challenges many families face.
“At Marsden Building Society, we understand the importance of financial education and well-being and have worked with a number of charitable organisations to deliver budgeting and money management courses for all ages. Building healthy savings habits today can help to minimise financial pressures in the future.”
Marsden Building Society has branches across Lancashire and offers a range of fixed rate, easy access and notice savings accounts to help members save towards their goals. More information can be found at www.themarsden.com.
*Survey of 125 Marsden Building Society members.