Parents in the UK face delaying their retirement plans due to the added expense of being the “Bank of Mum and Dad” for their children, according to new research from Standard Life.
Analysis from the firm reveals that six in ten parents with adult children are providing financial assistance, though this generosity is taking a significant toll on their own finances.
The retirement savings specialist found that 61 per cent of parents are helping their grown-up offspring navigate economic challenges. Three quarters of those offering financial help report that doing so has affected their own financial situation.
Experts from Standard Life highlight how major life events can reshape and sometimes derail long-term financial planning, with parental support emerging as a key factor disrupting retirement preparations.
Parents are being reminded to find the ‘right balance’ between looking after their pension and securing their pension
|
GETTY
The support takes various forms, with more than a quarter of parents contributing towards everyday expenses such as rent, household bills, and groceries.
Around 13 per cent are assisting their children with getting onto or moving up the property ladder, while a similar proportion fund significant one-off purchases like vehicles or household goods.
Longer-term financial backing is also common, with roughly one in ten parents putting money into savings accounts for their children or setting aside funds for grandchildren.
Amid ongoing debate about the burden of Plan 2 student loans, approximately 11 per cent of parents are covering university costs to help reduce their children’s reliance on student debt.
Households are struggling with childcare costs | GETTY
Britons continues to grapple with the cost of living | GETTY
More than a quarter of parents have drawn on their savings to fund this assistance, while nearly a fifth report they are now putting less aside for the future.
One in seven anticipate working longer than originally planned, with the same proportion expecting a more modest retirement and greater dependence on the state pension.
A quarter of retired parents identify raising children as the single most significant factor that limited their ability to build retirement savings throughout their working lives.
Despite the financial strain, most parents remain committed to supporting their children. Nearly half of those polled by Standard Life cite a desire to shield them from debt or hardship, while 46 per cent feel a strong sense of responsibility.
Estimated number of pensioners that would be affected by means testing the state pension on house value, broken down by region | GBN
Mike Ambery, the retirement savings director at Standard Life, said: “For many parents, helping their children financially is something they would do in an instant, without hesitation. “For many parents, helping their children financially is something they would do in an instant, without hesitation.
“With student loan repayments, higher housing costs, rising living expenses, and job market pressures all affecting younger generations, it’s understandable that parents want to offer support where they can.
“Life is rarely linear, and like many other milestones, it’s completely normal for pension savings to take a back seat when focusing on supporting children. However, at the same time, parents mustn’t lose sight of their own financial goals.
“Everyone’s journey to and through retirement can be better, and understanding where you are in terms of your own long-term finances is also important, to ensure you are heading towards the retirement you envisage.”
