Middle aged people are under tighter financial squeeze than their ‘boomer’ counterparts as they fork out elderly care costs and support for adult children.
Stephen Lowe, group communications director at retirement specialist Just Group, said: “When elderly parents or loved ones begin to need formal caring arrangements, it can be a difficult and emotional time.
“It is little surprise that Generation X feel that contributing financially to their parents or elderly relatives care is the right thing to do but it is clear that, for many, the cost of this additional support is adding to the already significant pressures squeezing this generation.
“The costs of contributing towards the care of elderly family members are not trivial – either in financial or emotional terms. Generation X is spending, on average, the equivalent of more than a full State Pension every year to provide this financial support.
“The money they are spending is unlikely to be surplus to requirements and there will be competing demands from saving into their pension pots to paying off their mortgage, from helping their children to supporting their elderly parents. It’s no wonder many seem resigned to working beyond the State Pension Age.”
One in 10 of Britain’s middle-aged people are supporting elderly relatives with care costs of more than £12,000 a year on average, new research has revealed. The study found those aged 44 to 58, loosely classed as Generation X, are forking out an average of £237.50 a week to cover residential care, food bills or carers.
The average annual burden of £12,350 for supporting elderly relatives is £800 more than the full new state pension, which is £11,542 pounds.
This starkly shows the financial burden being placed on people born between 1965 and 1980, who have been dubbed Generation Anxiety.
And it adds weight to growing research showing Gen X is under significant financial strain – far more than their older ‘Boomer’ counterparts.
The study, drawn together by the retirement specialists Just Group, shows 11 percent of Gen X – the equivalent of 1.6 million people – is making financial contributions to the care of their parents. Over 120,000 of them pay between £500 – £599 a week – equating to £26,000 – £31,148 a year while 150,000 fork out between £400 – £499 a week adding up to £20,800 – £25,948 a year.
A quarter (24 percent) of those who said they are financially supporting their parents or elderly relatives are also financially supporting their adult children. This is the equivalent of 390,000 people.
In fact, next six in ten – 57 percent – of Gen X parents who have adult children help them financially. In total this equates to 3.2 million Gen X’ers. Out of this cohort nearly a third are supporting children aged over 21 – this equates to 1.6 million Gen X’ers.
This includes helping with living costs, helping to clear debts or supporting to pay for a major life event. The research also shows half of Gen X parents with adult children have offspring over the age of 18 who permanently live at home with them.
The data also shows 38 per cent of Gen X – the equivalent of over 5.3 million people are not confident their pension savings will secure them a good standard of living in retirement. The same proportion believe they will have to work beyond the state pension age of 67 to make ends meet.
Forty one percent of Gen X has a mortgage – the equivalent of 5.7 million people – and forty five percent of these say it is taking them longer than expected to pay this off.
Thirteen percent of Gen X’ers with a mortgage do not think they will be able to pay off their mortgage by the time they are 67 – the equivalent of 753,000 people.
