Retirement income is becoming a family affair

New research shows 2 in 5 retirees support their families financially

Two in five people (40 per cent) retiring this year provide financial support to their families which may be at risk as their incomes drop, according to new research from Prudential.

The insurer’s Class of 2013 research, the latest of the annual studies conducted by Prudential since 2008, tracks the financial plans and expectations of people entering retirement this year. The report shows that retirees who provide support to dependants pay out on average £240 a month to help their families, with 11 per cent paying out more than £500 a month.

Everyday living expenses
Contributing to their families’ everyday living expenses was the most likely call on the finances of those expecting to retire this year. Around 15 per cent say they provide money regularly to cover items such as food or travel, while 14 per cent help with one-off non-essential items such as holidays, new TVs or even cars.

Supporting offspring
Prudential’s study also shows the make-up of UK households of those about to retire, with adult children and even grandchildren still living in the family home. Around two thirds (68 per cent) of those planning to retire this year will have no dependants living with them.
Almost a sixth (16 per cent) of this year’s retirees have children under the age of 25 living at home, while 13 per cent have children aged 25 and over still living with them. Around four per cent even share their homes with a child’s partner, while three per cent count their grandchildren as housemates.

Leaving an inheritance
Despite these financial pressures, around 49 per cent of those planning to retire this year still expect to be able to afford to leave an inheritance to their families, although fewer (37 per cent) believe their family actually expects to receive one.

Prudential’s research shows that those retiring in 2013 expect to receive average incomes of £15,300 a year. This is £3,400 lower than in the Class of 2008 study, when retirees anticipated annual incomes were £18,700 on average.

With nearly half of those expecting to retire this year still providing financial support to their families, retirement income is increasingly becoming a family affair.

A five-year low
Issues in the housing and jobs markets clearly make it financially difficult for adult children to leave home and most parents are happy to support them where possible. If they can afford the support there is no issue, but with expected retirement incomes at a five-year low, any additional outgoings could cause financial strain.
While supporting the family will always be a priority, it is important for people to also focus on their own comfort in retirement.

Essential outgoings
Around 11 per cent of people retiring this year currently help out with family household bills, like energy or phone bills, while 10 per cent will give money to support their grandchildren’s upkeep. 9 per cent contribute towards other essential outgoings, like car insurance premiums or education costs, and 6 per cent even help with mortgage or rent payments.

People in London and Wales expecting to retire this year are the most likely to provide this support, with 52 per cent and 49 per cent respectively saying they support their families financially.

Prudential’s study also shows that 30 per cent of those retiring this year have families but currently do not provide them with any financial support, while 30 per cent do not have any dependants.

Research Plus conducted an independent online survey on behalf of Prudential between 2-12 November 2012, interviewing 8,676 UK non-retired adults aged 45+, including 1,007 who intend to retire in 2013.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. WILL WRITING IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

LMJ Financial Management Ltd is authorised and regulated by the Financial Conduct Authority to provide investment advice and is bound by its rules.

The material on the site is the copyright material of LMJ Financial Management Ltd. You may not copy, reproduce, republish, disassemble, decompile, reverse engineer, download, post, broadcast,transmit,make available to the public, or otherwise use LMJ Financial Management Ltd's content in any way except for your own personal, non-commercial use. This includes, but is not limited to all individual fund manager data such as rankings or fund managers and ratings of fund managers. LMJ Financial Management Ltd does not accept any liability for your reliance upon, or any errors or omissions. Any other use of LMJ Financial Management's content requires the prior written permission of LMJ Financial Management Ltd.

LMJ Financial Management Ltd, Upper South Hall, Bullen Farm Business Centre, Bullen Lane, East Peckham, Tonbridge, Kent, TN12 5LX
Tel: 01732 874111 Fax: 01732 874222 Email: lmj@lmjfs.co.uk

©2013 LMJ Financial Management 2013.
Cookie Policy
l Privacy Policy l Disclaimer

 

HTML5 Powered with CSS3 / Styling, and Semantics