Article date: 12 February 2008
Supporting parents and own kids is ‘savings gap' Brits' biggest financial fear.
Britain's pension crisis is set to escalate, a new study warns today, with a generation of adults - facing the triple pressure of the financial ‘hat trick' scenario of supporting both their parents and their own children, whilst having no financial plans to safeguard their own future either.
The Norwich Union study reveals one in three Brits most dread the possibility of simultaneously financing both their children and their parents.
A further six in ten (59 per cent) over 50s admit their pensions and savings are unlikely to see them through retirement - leading over half (51 per cent) of adult children to fear the knock on effect on their own financial futures.
One in four (28 per cent) adult children are ready to cash in their savings and investments to fund their parents' retirement, while others consider taking their parents to live with them (24 per cent) and a fifth (21 per cent) would change their own lifestyles to find extra money.
Scott Brown, Norwich Union spokesperson says: "Talk of the so-called ‘savings gap' is nothing new- but this study is an urgent reminder of the very real impact this issue could have on the next generation of retirees.
"What makes it all the more alarming however is that, while adult children told us they fear supporting their own parents, an incredible two thirds (63 per cent) admitted they have no financial plans for their own retirement."
Two in five (43%) adult children suspect their parents might struggle financially in retirement and are concerned that the impact on their own lives will see them:
- losing their own savings (45 per cent)
- having to work longer than they had planned (37 per cent)
- not being able to send their children to university (25 per cent)
- having to radically downsize their own lifestyles (24 per cent)
But they refuse to broach the issue with their parents. Almost half (48 per cent) have no idea how their parents plan to fund their retirement - and six in ten (61%) say they could not imagine talking to their parents about their finances.
Scott Brown, of Norwich Union, said: "Unless we tackle this now, we face a never-ending cycle of financial struggle.
"The first step is simply for families to talk about their finances together and break this taboo."
Norwich Union has created a five-point plan to help families talk about financial planning:
1) Communicate. Get a grip on your family's financial situation and get your head out of the sand today. Ignoring the problem won't make it go away; it will just make it worse. It can be difficult to talk about money, especially with loved ones, but by being open and honest now you can help to avoid the burden of debt and stress later in life.
2) Remember you are not alone. Everyone needs to plan for their retirement, no matter what their age. People are living longer and healthier lives, so it's even more important to think about how and when you and your family can save for retirement.
3) Plan ahead. With a bit of planning, you can do a lot to help your family get ready for retirement. Fairly small changes now can make a big difference to your family's lives in the future - and you don't need to blow your monthly budget.
4) Money saving options. Pensions can be confusing and many people don't know where to begin, especially when there are so many other things to spend your money on. But the truth is that a pension is one of the most effective ways to invest for your retirement because you can get tax relief on the money you save in a pension scheme. If you're a parent don't be afraid to sit down and talk through your pension plans with your children, that way they will know what to expect and you'll avoid any surprises later in life.
5) Ask the experts. There are lots of organsations out there who can help. Don't struggle on your own, as a family you should collectively seek professional advice.
Useful sources of information:
- ends -
For further information contact
Tel: 0207 908 6447 / 07970 152155
Tel: 0207 908 6545 / 07968 616774
Notes to Editors
Norwich Union commissioned research with Tickbox.net amongst 1,084 adults in employment across the UK, between 18 December and 27 December 2007.
About Norwich Union
Norwich Union is one of the UK's biggest life insurers. It is a leading provider of life, pensions and investment products and one of the largest Financial Adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
Norwich Union has strategic alliances with building societies and other leading UK brand names including CIS and The Royal Bank of Scotland Group. Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media