Retirement news
More parents relying on their kids to fund retirement
19 March, 2007
By the time parents have reached retirement, the Bank of Mum & Dad has closed in favour of the Bank of Son & Daughter as one in four start to look to their kids for financial support
Four out of ten Brits admit that they have no real savings put aside for their old age, and are hanging on to the hope that their well-off children will help them out when they stop working.
April 5 signifies the start of the 07/08 tax year, as well as the deadline for making the most of your individual tax free savings allowance, however only 13 per cent are putting a sum of money aside in an ISA each month to help with their retirement.
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The 60 per cent without savings to count on in their old age don’t believe that they will be able to retire at 65, with one in three admitting they’ll be working well into their 70s before they can afford to quit work forever, a sobering thought for those who have only a state pension to their name.
Faced with the prospect of having little or no money to fall back on when the day comes, more than half concede that they will have to make cutbacks and 34 per cent are living in fear of the day when they have to give up work for good.
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Yorkshire Bank’s head of retail, Gary Lumby, says: “By not saving for the future, parents appear to be aware that they’re storing up hardship for themselves. Many are presuming their children might be the answer, however the easiest solution is to start saving now.
“Financial advisers would recommend people reaching their 30s should start investing at least 10 per cent of their salary into a retirement fund so they can maintain a comfortable standard of living in later life, and avoid this need to badger their children for money.”
Equity release is a popular option for a lot of retirees wanting to free up some cash, less drastic unless circumstances mean you are forced to downsize from your beloved family home. One in six are banking on inheritance to sort them out in later life and, keen to correct the mistakes of their own generation, two out of every three parents think that children should be taught the benefits of saving for retirement at school to make sure the kids don’t suffer years down the line.
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