Grown-up kids warned to keep hands off parent’s pensions
With the under-50s now heavily reliant on their parents for financial support and many still; living with parents, it will come as a surprise for them to find out that 64% of over-50s plan to use their assets to cushion their own retirement and spend their money while they can.
Instead of putting money aside for their future, one in five of under-35s are now banking on inheriting their parents’ and grandparents’ homes and financial assets to fund their own retirement. By comparison, just 2% of over 50’s expect their children to support them in their twilight years.
Even the Lib Dems are expecting the over 50’s to bail out the younger generation, as Nick Clegg revealed with the ‘pension for property’.
The Lib Dems want parents and grandparents to use their pension pots to help younger family members onto the housing ladder.
Alastair Clayton, a spokesperson for PMGTV and the over 50’s producer of HOW TO plan for your retirement!, said: “Not only do grown-up children expect their parents to bail them out financially over their lifetime, it now seems they expect to live off this group’s hard-earned cash even after they have gone.
“The over 50’s might represent the most cash-rich end of society with the largest disposable income, but they shouldn’t be viewed as a solution to the country’s financial problems. We’ve worked and saved hard for our money, so surely we’ve earned the right to spend it as we see fit. “
According to the report appetite for investing in pensions has hit all-time low, with just a third of the working-age generation now making regular contributions towards a pension pot.
Saving for retirement holds little appeal for the ‘lost pension generation’, despite the government’s introduction of automatic enrolment, with just 9% planning to start making contributions over the next 12 months.
Of the 2,000 people surveyed for the documentary series, found that unlike the over 50’s, of which 40% have saved enough for a comfortable retirement, just 7% of under 50 year-olds have made adequate plans for their old age.
Compounding the problem, nearly half of under 50’s (40% of men and 53% of women) have failed to make any financial provision for their retirement; 18% of this group say they never will.
To fund their retirement, 80% of these over 50s will draw on their state pension, 62% on their private pension schemes and 27% on their savings; 27% will sell their property and downsize, 23% will continue to work past retirement age, 11% will cash in stocks and shares, and 6% bonds.
Just 4% expect to inherit from their own parents.
Of the 40% of over 50s questioned who said they had paid enough into their pension to support them through retirement, just over half plan use their savings to fund a luxury, no expenses spared, holiday, 47% will invest in private health insurance, and one in five plan to move abroad.