Millions of parents and grandparents across Britain are compromising their retirement security to help fund university education for younger family members, new research from Rathbones has revealed.
The survey, which questioned 1,010 parents and grandparents currently contributing to education costs, found that more than a quarter anticipate retiring with a diminished standard of living compared to their original expectations.
Nearly one in four respondents said they expect to postpone their retirement entirely, whilst 17 per cent plan to reduce their pension contributions to meet university expenses.
Analysts highlight the significant financial burden families are shouldering as they attempt to shield children and grandchildren from mounting higher education costs and the prospect of substantial student debt.
Parents are using their pension savings to fund their children’s university costs
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Of those anticipating a delayed retirement, over two-fifths believe they will need to remain in employment for at least three extra years, with 11 per cent expecting to work more than five years beyond their planned finish date.
Rebecca Williams, a financial planning divisional Lead at Rathbones, says: “It’s completely understandable that parents want to give their children the best possible start in life and for many, that still means university.
“But it shouldn’t come at the cost of their own financial security. Education is a worthwhile investment, but it’s important to be clear on the long-term cost and to balance that with your own plans.”
Ms Williams noted that even clients in robust financial positions frequently express concern about how supporting children’s education might affect their own wealth and retirement aspirations.
Younger Britons are increasingly being saddled with expensive loans and costs
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Grandparents are forking over their retirement savings to fund their children and grandchildren
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The research emerges against a backdrop of intensifying debate over whether university education delivers sufficient value for money.
A recent Government-commissioned review revealed that young people not in employment, education or training have reached a 12-year high, prompting renewed scrutiny of higher education pathways.
While 52 per cent of respondents believe a degree remains essential for securing well-paid employment, significant numbers cited competing concerns.
Some 42 per cent expressed worry about student debt levels, 41 per cent pointed to the growing appeal of vocational training routes, and 31 per cent highlighted weakening job prospects for graduates.
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Ms Williams added: “The reality of today’s job market is that a degree on its own isn’t a guarantee of success.” Separate analysis from Rathbones indicates that graduate debt burdens fall unevenly across different income brackets.
Those entering the workforce on salaries between £45,000 and £50,000 often end up repaying more in total than any other group, as they remain within the repayment system longest whilst interest accumulates over decades.
Charlie Newsome, a senior investment director at Rathbones, says: “Many parents would rather work a few years longer themselves than see their children start their careers under the weight of substantial student debt.”
He added that rising tuition fees and increased borrowing costs have strengthened families’ determination to provide maximum support.