The UK’s retirees are financially supporting their families long after leaving the workplace, with new research 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.
35% admitted they’ve dipped into retirement savings or pension pots in order to help loved ones and 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.
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."
Rob Pheasey, chief executive at Marsden Building Society, said: "These findings highlight the increasingly important role that older homeowners are playing in supporting younger generations financially. Whether it's helping children onto the property ladder or providing assistance with rising living costs, many retirees are continuing to share their wealth long after they've stopped working.
"However, more than a third of those helping family members are drawing on retirement savings or pension income to do so. For this reason, it's important that older borrowers have access to flexible lending solutions that enable them to achieve their financial goals without compromising their retirement plans. We continue to see growing demand for later life lending from customers looking to make the most of their home’s equity to help maintain financial stability in retirement."
