Supporting Families Costs £3,700 a Year for Newly Retired
06 April 2022
- More than a third provide financial support to dependants
- Money goes on providing rent free accommodation, regular cash towards the cost of their grandchildren’s upkeep and support with property purchases
Retiring during a pandemic is unlikely to be easy but 2021’s retirees are still financially supporting their family to the tune of £3,700 a year, new research from Key Later Life Finance – the UK’s leading advice firm in this sector – shows.
Despite the increasing strain on finances, more than a third of the newly retired (34%) provide financial support to their family. On average, they give £307 a month to help family - nearly £3,700 a year - with 10% giving over £500 a month to family members or more than £6,000 a year.
With the average income in retirement £21,663, this means those planning to retire could end up spending around a sixth (17%) of it helping families which would be a significant drain on their retirement income – especially as inflation and the high cost of utilities starts to bite.
The reason for family funding varies in terms of regular support, around one in 11 (9%) allow their family to live with them rent free, while others give money towards the cost of their grandchildren’s upkeep (6%), give cash on a regular basis for everyday living costs (6%), or cover the cost of other essential outgoings (5%).
Retirees also provide significant support to cover major costs, whether that be a new car (7%), university (6%) or property deposit (5%).
Looking at differences between genders, women – who typically have a lower income - provide a greater amount of family financial support each month than men, handing out £318 compared to £300. They are also almost twice (12%) as likely as men (7%) to provide rent free accommodation to family members.
Will Hale, CEO at Key Later Life Finance said: “Juggling your finances as you move between full-time employment and retirement can be a challenge – especially if you are supporting your wider family as well. It is only natural that parents want to help whether it is with time, money or advice but it is important that they remember their own needs as well.
“Retirement should be an opportunity to relax and enjoy the hard work that you have put in over a lifetime. However, your finances can be limited by the practical challenges of having a family, buying a house and living a modest lifestyle while at the same time trying to save into a pension.
“This makes it more important than ever that parents consider all their assets at retirement – including their home – as this will not only allow them to improve their own finances but potentially provide more support to their families.”