‘Sandwich’ generation bankrolling families
A “club sandwich” generation of pensioners is bankrolling their families to the tune of £4,000 a year, research has found. The study found that those retiring this year are supporting an average of three family members. People in their 40s and 50s have been described as a “sandwich generation” who must support their children buy a house and their parents pay for social care. But research claims that today’s retirees face pressures from an extra group – grandchildren.
A “CLUB SANDWICH” generation of pensioners is bankrolling their families to the tune of £4,000 a year, research has found.
The study by Prudential found that those retiring this year are supporting an average of three family members, including children, grandchildren and parents. People in their forties and fifties have previously been described as a “sandwich generation” who must support their children to buy a house and their parents to pay for social care.
But the research suggests that today’s retirees face additional pressures from an extra group who require their help – grandchildren.
In some cases, the study found, those in their sixties were also supporting their own parents. Stan Russell, a retirement expert at Prudential, said: “Our own research does show that we’ve got a percentage of money going to children, some going to grandchildren and some going to elderly parents so being stuck in the middle there is a good analogy.
“Part of it is down to increased longevity, and as a nation more of us are living longer. More of us are getting beyond our eighties, so we have got those people who need support and who are still with us.”
People planning to stop work this year expect to give their families £360 a month on average, a total of £4,320 after tax in a year. One in five said they handed out £500 a month on average to family members.
Much of the money is going to fund university fees and living costs, with 23 per cent of people saying the cash was used for this. Another 22 per cent were helping family members buy a home, while 27 per cent were helping with everyday items such as food and travel.
A minority of retirees – one in four – said they had a family but did not provide any financial support.
High house prices compared to salaries leave many young people unable to buy without financial help from parents or grandparents. The average firsttime buyer is now in their early thirties, compared to just 23 in 1960.
Figures released last year by Legal & General suggested that the “bank of mum and dad” now helps to fund a quarter of house purchases, lending more than £6.5billion to help younger relatives buy a home.
Mr Russell added: “The 2018 generation of retirees have benefited to a large extent with the property boom, with stock market booms, with having final salary pension schemes.
“Fewer and fewer of the future generation, unless they’re in the public sector, will have that secure high level of income.”
“I think the parents and grandparents who have that money are feeling that they don’t want to go to their grave in a gold-lined coffin, they’re quite happy to help where they can.”