Around 1 in 3 parents and grandparents entering retirement this year plan to spend more than £4,300 a year supporting family members, according to research by Prudential.
In a survey of 9,896 adults, 31% of those planning to retire in 2018 said they expect to use their retirement income to provide financial support to their families.
Those planning to offer support expected to give £360 a month to 3 people on average, coming to £4,320 a year after tax.
Most expected to provide this to younger generations, with children (56%) and grandchildren (25%) the most common recipients.
A minority also planned to provide financial help to parents (8%) or grandparents (2%).
Quote from Nigel Holland:
“In my opinion, people should start saving early on in order to fully ensure that they have the funds to support a stress free retirement. This way they will not only have the funds to support their own living costs, but if they wish to help out family members, they won’t face massive repercussions in their finances.
Auto-enrolment is available so that all workers within the UK earning more than £10,000 a year, and are also over the age of 22 yet below the state pension age, will automatically be enrolled into a workplace pension. Although this is a good start to get people saving, I would recommend that people have other methods of saving for their retirement such as a Lifetime ISA which allows the person to contribute £4,000 a year and earn back 25% from the Government, meaning a maximum bonus of £1,000 a year.
Those that are due to retire soon, who are over the age of 55 and own their own home, can still earn some extra money through equity release. This is where people can unlock some of the money they have in their home, which is tax free, and thus spend it on anything they like.
All of which helps to boost the sum of money a person has for their retirement stages.”