With 54 % of retirees struggling to make ends meet, new research from Engage Mutual Assurance reveals that families are stepping in to provide a financial life line to their elderly relatives.
Nearly one in ten British adults (9%), the equivalent of more than 1.7m adults, is helping with the costs of their parents' retirement. Of these, 22 % have given money to their parents to help them to make ends meet on day-to-day expenses; 22 % are paying towards their parents' care, and 33 % have taken their parents into their or a relative's home in order to reduce their costs of living and care.
The research was conducted as part of Engage Mutual's 3GB research, which looks at the changing financial relationships between family members. A GB representative sample of adults with parents over the age of 65 was questioned in order to understand how they are supporting their parents in retirement.
3 % of adults with parents over 65 (more than half a million) have brought their parents to live with them or relatives to cover the costs of their retirement. As parents get older, the need to move them into the family home in order to provide care increases significantly. Of Britons with parents between the ages of 85 and 94, one in ten are accommodating their parents in their or a relative's home in order to reduce their costs of living and care.
One in four Britons with parents over 65 is concerned about how the family will cover the costs of their parents' retirement or that their inheritance will be spent by their parents in paying for their retirement.
Of all adults with parents over 65:
- 14 % say that they are worried that they cannot afford to pay for their parents to go into a care home.
- 11 % say that they are worried that they cannot afford to support their parents in retirement;
- 9 % are worried that their parents cannot afford their own retirement; and
- 8 % worry that their parents will spend all of their inheritance to fund their retirement.
Just 42 % of adults say that their parents have enough money saved to afford their retirement. A further 5 % expect their parents to release equity from their home in order to afford retirement and 6 % say that their parents have downsized their home in order to afford their retirement.
Going further to support their parents in retirement, 1 % have saved money to help support their parents through their retirement.
- The South of England has the highest proportion of people worried about how their parents over 65 will afford retirement, with 45 % voicing a concern.
- Those in the Midlands are the most likely to be supporting their retired parents (16%).
- People in Wales are the most likely to say that their retired parents have enough money saved to cover their retirement (57%), whilst those in the Border region are least confident in their parents savings (19%).
Karl Elliott, for Engage Mutual Assurance says: "As costs of living increase, retirees are finding it increasingly difficult to make ends meet. In hard times people often turn to family members for support and, as our research shows, this is the case for elderly relatives as well as young adults who are finding it increasingly difficult to disconnect themselves financially from their parents. With the size of Britain's retired population growing, and costs of living increasing, it is important that people save little and often towards their retirement in order to reduce the pressure on themselves and their family to make ends meet in old age."