How to avoid relying on your children to help fund retirement
A study conducted by MetLife found that 16% of over-40s think have not saved enough for a comfortable retirement and as a result they fear they will need to turn to their offspring for support.
While nearly three quarters (75%) of the 1,141 over-40s surveyed said having a guaranteed level of income in retirement was important, some 45% were worried about the financial risks they will need to take to secure this.
The good news is that more than half of over-40 retirement savers think they are on track with their savings, rising to 76% among the over-55s.
The bad news is that about 30% of over-40s think they are behind target, while 16% of over-55s said they have not saved enough yet. According to MetLife, both age groups are being squeezed by a combination of low long-term interest rates and ongoing stock market volatility, as well as narrowing choices on retirement income.
Simon Massey, wealth management director at Metlife, said: “Parents will have worked hard to support their children so perhaps they should feel entitled to rely on them if they need financial support in retirement.
“However, it is a bit of a role reversal when it’s retired parents banking on their children for money. It will also have an impact on how much the children can save for their own retirement which in turn can cause problems.”
To ensure savers understand the choices available to them, MetLife has launched a campaign to deliver Real Pension Freedom supported by advisers, with a focus on the role guarantees can play in retirement.
“Guarantees can help people approach their retirement with greater certainty and confidence and a Guaranteed Drawdown solution provides the peace of mind that comes with a guaranteed level of income for life in retirement while retaining full access to your money,” says Massey. “This can help mitigate the risk of needing to call on children’s help”