24th October 2014
Five million Britons have been caught in the ‘stretched middle’ financially supporting younger or older family members.
With elderly parents living longer and grown up children unable to fly the nest, or returning home, there is a generation of people stretching themselves thin financially.
Research by insurer LV= shows on average parents spend £10,252 per year on their children, with £6,411 spent on adult children aged 22 and over, while those supporting older family members spend £1,367 a year.
There is also a number of the ‘stretched middle’ who are becoming part of the ‘sandwich generation’, where they have financial responsibility for both adult children and elderly parents.
LV= said there is over a million people who have ‘double caring’ responsibilities, looking after older family members, children and in some cases grandchildren. The main areas of support the sandwich generation are paying for are food and household bills – with 54% doing so. The same amount are paying off loved-ones debts, 23% are funding home renovations, 32% are funding medical care and 11% are funding education fees.
However, funding an extended family is not easy and 45% said the financial pressure is challenging and a quarter have had to take out a loan to subsidise family members. A total of 8% have increased their working hours and 5% have taken on a second job.
Richard Rowney, LV= life and pensions managing director, said: ‘The research shows how the changing nature of modern families is placing real financial pressure on those who are providing support to others. This help often lasts for many years longer than people may have originally thought.
‘Nobody wants to think about the possibility of getting ill or being made redundant however the reality is that some of us will be off work for a period of time at some point in our career. Having a contingency plan, such as income protection in place offers you peace of mind that if you fell ill or were made redundant you would receive a regular income which would enable to you to carry on supporting yourself and your loved ones.’
With life expectancy pushing well into the 80s, around three million people in the UK are now supporting an older relative, spending £1,366 in doing so. A third of people are helping towards care costs and four in 10 are helping to supplement retirement income with regular handouts.
There are a number of young adults who still rely on their parents financially as well. Over one in 10, 14%, of Britons are financially relied upon by adult children, spending £6,411 a year on them. Over a third, 36%, help to fund bills, one in three help with accommodation costs and 28% are paying off adult children’s debts.