NEARLY 40% SUPPORT GROWN-UP CHILDREN, A SPOUSE OR PARTNER, A PARENT, AN ELDERLY RELATIVE, OR A FRIEND

When times are hard, it makes sense that families will look for ways to support each other emotionally and financially. And if you’re one of the many retirees supporting family and friends financially, you’re not alone.

With financial pressures such as day-to-day living costs fuelled by inflation, expensive property, and education fees, retirees are increasingly expected to give their grown-up children, family members, and friends some financial help.

A GROWING TREND AMONG RETIREES

Although most retirees will be in their 50s, 60s, and 70s or more and less likely to have dependent children, research shows that nearly 40% [1] of those surveyed support grown-up children, a spouse or partner, a parent, an elderly relative, or a friend. It is fair to say that many people have been struggling with rising costs over the last few years, and it’s perhaps not surprising that most of that support has gone towards day-to-day living costs.

Following this, helping with house buying, wedding costs, education, or university fees are common reasons for offering financial assistance. Advancing an inheritance and covering care or medical costs were other major motivations for providing support, too.

FINANCES AND SETTING REALISTIC BOUNDARIES

Thankfully, helping their children is something many retirees are happy about, with almost half (47%) saying it’s very important or essential to be able to do that throughout their lives. If helping your children and other loved ones throughout your lifetime is important to you, there are some things to consider carefully. Your money has to last as long as you do to support yourself throughout your retirement, however long that might be. If the money you’re giving to loved ones was an unexpected outgoing, do you know the impact that might have on your financial goals?

Balancing the desire to help with the need to maintain your financial stability is crucial. Having a clear understanding of your finances and setting realistic boundaries for how much you can afford to give will ensure your and your family’s needs are met. Additionally, transparent communication with your loved ones about your financial limits can prevent misunderstandings and ensure everyone is on the same page.

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Source data:

[1] Data from the Great Retirement report by the Wisdom Council, in association with M&G – 17/05/24

THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.