Financial independence isn't something that's necessarily easy to achieve these days. The rising cost of living means that many younger people in particular are feeling the strain, and will often turn to family members for help – and it isn't only the Bank of Mum and Dad that they call upon…
Latest research from over-60s property experts Homewise shows that the Bank of Gran and Grandad is very much open for business, with 52% of grandparents surveyed saying that they regularly give money to their children or grandchildren, totting up to an average of £571 each year. Not only that, but 54% of over-55s have given a one-off lump sum to a family member in the last five years, with 14% of those having gifted more than £10,000.
However, this generosity could cost them more than they think, and many grandparents are feeling financially strained as a result. Indeed, 35% admitted that they've had to make sacrifices in order to help support their families, with 59% cutting down on socialising and 24% not going on holiday.
It could be impacting their more basic standard of living, too, with 18% having postponed or cancelled refurbishment on their homes, and the same percentage have even had to cut their own food bills in order to help family members. Many are also sacrificing their time as well as money, with 42% of grandparents giving more than five hours each week to help with activities such as childminding.
Mark Neal, managing director at Homewise, said that the "research reveals the extent to which grandparents in the UK are being relied upon for money and time by children and grandchildren. Helping family is important to many, but it is worrying if they are suffering as a result".
He added that far too many already have to scrimp and save in retirement, particularly if they're living in "unsuitable housing", and if they need to support family members as well, it could take an even greater toll on their finances.
Relieve the pressure
While many grandparents want to be able to enjoy their retirement, it can't be denied that they want to help their family as well. This is where a bit of financial planning can come in to help strike the right balance, be it through making sure you've got the right savings account to make your money go further, or looking to alternative ways to give your retirement income a boost.
One of these ways could be through using your home as a financial buffer, such as through downsizing or equity release. Either of these could be suitable depending on your circumstances and they could both free up valuable amounts of cash, giving you a lump sum that can be used as an income, to repay debts, or simply to have as a financial back-up to support yourself – or your family members – when required.
Find out more about equity release by contacting our no obligation consultation service, and see if it could be a way to keep your bank open for business without falling into financial difficulty.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.