Bank of Sons and Daughters Replaces Bank of Mum and Dad

A new report from Aegon suggests that younger people are not as confident in their 40 and 50 ‘something’ yr old parents’ ability to financially support themselves in retirement and later life.

The report suggests that over half of adults expect to be required to financially support their parents in retirement ending the trend where 2/3^rds of adults have already given financial support to their children.

Comment

This may be due to parents already passing wealth to children when they were younger to plan early for inheritance taxes and disposal of assets (whilst fit and healthy) due to the care fees means test.

Social care is also a problem.  With an ageing population, the social care system is under strain and already ‘broken’.  Perhaps more children in their 20s and 30s are planning for care of their parents.

It may also be a sad note that some sectors of society have grown up with greater reliance on benefits and even expect them as a ‘right’ meaning they have not planned for retirement of bought their own home during the difficult times of the late 1980s with +15% interest rates, negative equity in the 90s and then lower interest rates but much higher prices stretching affordability in the noughties and the 2010s.

As a hard working couple, we find it hard to comprehend why a number of (bit not all) of our own ‘middle aged’ friends have very little savings or pension funds and still, to this day, live for today and make no plans for the future despite good educations but still have a lack of self responsibility in saving for the future.   Is this a social problem that has been caused by successive governments?  We don’t know, but there is a time bomb ticking.