Sandwich generation’s finances spread too thinly
Around 2.4 million people, typically aged between 40 and 60 years of age, currently shouldering some degree of financial responsibility for both their offspring and older relatives are increasingly concerned about the strain on their finances. Most can’t afford to save, believe their pension income will be inadequate and are worried about becoming ill or dying and leaving their families in financial difficulty.
According to a report entitled ‘Income Roulette’ published by insurer LV=, more than half of this group (54%) say they want to put money aside into a savings account but can’t afford to. Some 32% of this group has less than £125 disposable income per month, with 46% citing their children as a ‘constant source’ of unexpected expenses.
On average people in this group will retire with a pension pot of around £60,000, which would typically equate to a monthly income of around £260.
More than half of them (52%) are concerned about either themselves or their partner developing a serious illness in the course of the next 12 months which could impact their finances. That compares with 35% of the national average.
And they are almost twice as likely to worry about dying and leaving their family with no income – 30% of the group cite this as a concern, compared with 17% as a national average.
Justin Harper, head of marketing at LV=, said: “It is clear this generation feel they are being pulled in many directions, with pressures to care for older relatives and ongoing responsibilities for their children. The Sandwich Generation have huge financial obligations and with the rising cost of living, are worrying more about what could be around the corner. Spreading their finances too thinly and dwelling on their worries, means the impact of having little or no plans in place, could expose them to a real income shock.
“What this tells us is that there’s a huge latent demand for advice that spans protection and retirement planning. Whether that’s safeguarding their income during their working life or considering an investment strategy for their retirement that delivers both growth and security, as well as ways to supplement their income in retirement.”