Those planning to retire in 2020 expect an average income of £20,663 but around a fifth of this (£3,700) has been earmarked to support the finances of younger family members.

This equates to £311 per month on average according to over 55s specialist adviser Key. However, it found that one in eight contribute £500 or more per month.

The study of 1,000 people found that 28% allow their family to live with them rent free while one in four give cash to cover everyday living costs like food. For 15%, they contribute towards supporting their grandchildren.

One in five (20%) also help their loved ones by covering some or all of their household bills while 19% pay for treats such as holidays. For 15% of potential retirees, they said they have already helped fund a deposit or put money towards the purchase of a property, while 13% paid for university fees or associated living costs.

Will Hale, CEO at Key, said: “Whilst many older people enjoy treating their loved ones – even if it is just paying for a nice meal – a third of those who intend to retire in 2020 are doing more than this; regularly topping up their wider family’s finances.

“The current economic situation is likely to place even more pressure on people’s finances but with the pandemic impacting pension savings this could see some retirees having to tighten their belts and could impact their ability to continue to support younger generations.

“It is important that families have open discussions about their finances.  Many younger people would be horrified if they knew older members of their family were struggling due to their generous natures. Taking the time to speak to a specialist adviser is a sensible step to look across all your assets and understand how much support you can provide. Using housing equity is one way older people can continue to support family and/or top-up their own income.”