Retirees urged to plan method to ‘make money last’

World News

Propping up the family finances is a burden being shouldered by those at retirement age, helping their adult children.

With the cost of living continuing to rise, personal finances are being stretched more than ever, creating a struggle for many.

New research from abrdn shared with has provided insight into the extent to which parents are supporting their adult children financially amid these circumstances.‌

Of all the respondents aged 55 and over, some 16 percent said they have grown-up children who still depend on them financially.

For those at retirement age, over one in 20 said their adult children still rely on them for finances.

Many parents are now adjusting their expectations to support family members financially once they have reached retirement.

This includes for day to day living costs, getting on the property ladder or wedding expenses.

Other reasons cited include helping with education costs or university fees, and providing money early from an inheritance.

But while parents are providing this support, many are also feeling a financial pinch themselves.

The cost of living crisis has significantly impacted the standard of living for over 55s, and their ability to save for the future.

More than half expect their financial situation to get worse over the next 12 months, while many have seen their savings growth stunted, unable to pay in as much as they would have liked.

Over a third have been forced to draw from their savings to mitigate rising costs, potentially jeopardising their future retirement plans.

Colin Dyer, financial planning expert at abrdn, told : “A sky-high cost of living has become a fixture of life post-lockdown.‌

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“At any age long-term rising costs can feel overwhelming.

“It’s clear that this is driving parents to support their grown-up children financially. 

“For those at retirement age, while their regular income may have stopped, helping their grown-up children through tough times is important to them.

“While it’s great that some parents are able to be generous with their own wealth, retirees need to ensure that this has been factored into their planning to ensure they have enough to live on throughout retirement. 

“With retirements lasting 30 years or longer, it’s vital that people are fully aware how they’re going to make their money last.”

Mr Dyer stressed it is important for Britons to understand how much they will need in retirement, as well as what they can afford to spend and give away.

It is also likely this will change as the years go on, and so a clear picture of one’s financial situation can be helpful.

He added: “Speaking to an expert about financial advice may help you plan so you can take full advantage of the options available to you.

“It can help you understand to what extent you can help your children financially, while avoiding any significant risks to your own plans.”

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