The research into the ‘Class of 2014’ is Prudential’s seventh annual study tracking the future plans and aspirations of people who plan to retire in the next year. It reveals that retirees who still provide regular support to their dependants pay out an average of £250 per month, or £3,000 over the course of a year.
This year’s retirees who have dependants are providing financial support for two other people on average – most likely to be children or grandchildren. However, there is a wide range across the country in the number of dependants being supported, for example in the West Midlands it is nearer four. At least half of those dependants who are being supported by this year’s retirees are family members aged 25 or under.
Helping out with everyday living expenses is the most common reason given by this year’s retirees for financially supporting their dependants. The research shows that 14 per cent provide help with everyday living costs, such as food or travel, while 11 per cent hand over money for luxury items such as holidays, new cars or TVs.
Despite all the financial support already being given, Prudential’s research shows that 30 per cent of the Class of 2014 still believe they will be able to afford to leave an inheritance, averaging nearly £180,000. However 24 per cent say they will not be able to afford to leave any inheritance at all.
Stan Russell, retirement income expert at Prudential, said:
“Our research shows that retirement doesn’t necessarily mean an end to family financial commitments. Although the incomes people expect to retire on in 2014 have increased for the first time in three years, many retirees will still be feeling the pinch when they first stop working.
“Increasingly we’re seeing retirement incomes being stretched in ways that wouldn’t have seemed likely a generation ago. Multiple financial dependants and multi-generational homes are further reasons why saving as much as possible as early as possible, and seeking professional financial advice, are vital for those preparing for retirement.
“Giving a financial helping hand to family is very important, but people retiring this year are risking their own standard of living with the levels of support they provide.”
