More than a third of people planning to retire in 2020 continue to financially support their families, new research from equity specialist Key has shown.
A survey of over 1,000 people who had decided to retire this year revealed that 34% of people give handouts to family worth £3,700 per year.
With an average retirement income of £20,663, this suggests they will be spending almost a fifth of their income supporting younger family members, the equivalent of £311 per month. One in eight (12%) plan to contribute £500 or more each month.
The most popular reason for financial support was to allow family to live with them rent free (29%), while one in four (24%) give regular cash to cover everyday living costs like food and nearly one in five (19%) fund one-off non essential items such as holidays.
Will Hale, CEO, Key, says: “Whilst many older people enjoy treating their loved ones – even if it is just paying for a nice meal – a third of those who intend to retire in 2020 are doing more than this – regularly topping up their wider family’s finances. The current economic situation is likely to place even more pressure on people’s finances but with the pandemic impacting pension savings this could see some retirees having to tighten their belts and could impact their ability to continue to support younger generations.
“It is important that families have open discussions about their finances. Many younger people would be horrified if they knew older members of their family were struggling due to their generous natures. Taking the time to speak to a specialist adviser is a sensible step to look across all your assets and understand how much support you can provide.”
