By Claire West
Adult Children Bank On Retired Parents
Retiring parents face increasing financial pressure from adult children, according to new research from Aviva. Although work and wages may have come to an end, the bank of Mum and Dad is expected to stay open.
The research reveals:
18% of parents set to retire anticipate adult children will need financial help
30% of adult children expect to rely on financial help from retired parents
Parents approaching retirement* face greater financial pressure as their grown up children expect ongoing handouts. Although this will come as no surprise for nearly one in five (18%) parents, who anticipate providing funds in the future, this is considerably lower than the three in ten (30%) adult children who are banking on it.
Of those who expect to either give or receive financial support, helping with a house deposit is cited most often. Nearly two thirds (62%) of parents anticipate helping their children to buy a home and almost half (44%) of children are expecting it. Grandchildren are the second most popular reason, with 47% of parents expecting to help fund the next generation and nearly a third (30%) of adult children relying on it.
Yet financially supporting children in retirement is an emotive issue. Half (50%) of parents who plan to support their offspring feel worry, concern or anger at the thought of helping out their adult children when retired. Twenty nine per cent of parents worry that further handouts will limit their retirement income and 16% are concerned they will have to continue working as a result.
Retiring parents are also a concern for their children, with four in ten (39%) worrying about how their parents will cope generally and one in six (16%) being anxious that they will need to support their parents financially.
Despite this, discussing retirement finances remains a taboo topic for a lot of families, with 41% of parents saying they have never broached the subject with their children. Yet three quarters (76%) of parents would like to discuss pension plans with their offspring and 30% would use it as an opportunity to understand joint concerns and expectations. Over half (53%) of adult children want to talk to their parents about pensions; with a quarter (25%) saying it would help them understand their own concerns.
The lack of discussion on this subject could explain the alarming number of adult children who have little knowledge of financial products they will require themselves one day. One in five adult children (20%) admit to knowing nothing about pension planning, and an alarming 70% do not know what an annuity is.
Clive Bolton, ‘at retirement’ director for Aviva said: “The financial landscape and the pressures on the modern family have massively changed over the last decade, as has the profile of a ‘typical’ retiree. Rather than inheriting from their parents, our research suggests many adult children now expect financial help from their parents at a time of life when they may struggle to give it. By discussing plans sooner rather than later, families can avoid confusion and disappointment later on.”