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Equity Release

Newly retired spend £3,700 supporting their family

Christina Hoghton
Written By:
Christina Hoghton
Posted:
Updated:
06/04/2022

Unlocking property wealth is one way that parents are able to financially support their children

More than a third of the newly retired (34%) provide financial support to their family, according to research from Key Later Life Finance.

The advice firm found that, on average, they give £307 a month to help family – nearly £3,700 a year.

A significant minority – 10% – give even more, handing over £500 a month to family members, or more than £6,000 a year.

Drain on income

The average income in retirement is just £21,663, which means that those planning to retire could end up spending around a sixth (17%) of it helping their family. This could be a significant drain on their retirement income, especially as inflation and the high cost of utilities starts to bite.

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%).

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.”