Pensioners bankroll whole family
A THIRD of pensioners are bankrolling three generations of their family, a study reveals.
The retirees are handing over about £4,300 a year to grandchildren, children and, in the case of some pensioners, their elderly parents.
The handouts often mean they are dipping into pension pots put aside for their retirement, the research found.
Finance experts are now warning that this selfless generosity could leave pensioners at risk of running out of money they need to pay their bills.
Financial services group Prudential surveyed 1,000 people planning to retire this year.
They found 31 per cent give cash to family members, typically supporting three people.
Taking all monthly payments into account, they can expect to give their extended family about £360 a month on average.
Women were found to be slightly more generous than men, giving an average of £374 a month to family members, compared with men, who typically hand over £349.
Nearly one in five of those expecting to retire estimates he or she provides more than £500 a month to family members.
The money tends to cover everyday living costs, such as food and travel, according to 27 per cent of those who give money monthly.
Almost a quarter provide financial support to help with university fees and living costs, while 22 per cent say they give cash to help loved ones on to the property ladder. Many pensioners who help family members financially provide support for three people.
In more than half of the instances, the money goes to one of their children.
A quarter give to grandchildren, while eight per cent give to their elderly parents.
Just 26 per cent of those retiring this year with families do not provide them with any financial support.
Prudential’s Stan Russell said: “Increasing financial pressure faced by people of all ages, such as the cost of university education and the rising cost of buying a home, means that providing financial support to family members continues well into retirement. While it’s understandable so many people want to financially support family members, it is important to make sure they have enough money set aside themselves to cover their own living costs and don’t put their retirement at risk.
“Saving as much as possible as early as possible and seeking professional financial advice is crucial for those who don’t wish to risk feeling the pinch in their own finances by helping out family members.”
The findings are part of Prudential’s Class of 2018 study, which records the financial plans and aspirations of people planning to retire in the year ahead.
This year’s report highlights how retirement does not necessarily mean an end to supporting a family.