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Older parents face financial challenges

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12/02/2018
The number of parents approaching retirement with children under 18 is predicted to reach nearly one million over the next decade, with a real impact for family finances.

The research from OneFamily showed the trend being driven by unplanned late arrivals, second marriages, and not finding the right partner until later in life. As a result, One in six (16%) are saving less toward retirement and a similar number (14%) are dipping into savings as a result. This is having a knock-on effect on retiring, with 17% of these older parents saying they will put off leaving work.

It also means downsizing is unlikely to be an option for these older parents, whose numbers are likely to rise from 400,000 to 900,00 in the next decade. These estimates also reflect Office for National Statistics figures, which show a steady rise in the ages of mothers and fathers with women over 30 now more likely to enter parenthood, than their younger counterparts.

Financial considerations may be cause as well as effect for having children later. The average deposit for a first home is now £33,000 and one in ten older parents said they prioritised saving for a home before having children. Around half (48%) of these older parents said they had children later in life in order to be more financially comfortable.

Nici Audhlam-Gardiner, managing director of OneFamily Lifetime Mortgages, said: “It’s great to see parents having children later in life, however these bundles of joy come at a high cost. At 60 most parents have seen their children fly the nest, but instead this group of over 60s are still facing the costs associated with younger children.

“With young children living in the family home, downsizing is also not an option. However, there are now many different ways of funding retirement, including lifetime mortgages, where homeowners can take advantage of the large house price rises we have seen over recent years. Over 60s thinking about how to fund their retirement should speak to a financial adviser and explore all the options open to them.”

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