Thirty-four per cent of people planning to retire in 2020 are continuing to financially support their families with regular handouts amounting to over £3,700 per year, according to new research from Key.

With retirees planning on an average retirement income of £20,663 – a figure that may drop due to the impact of the COVID pandemic – the over-55s specialist adviser said its research suggests that retirees anticipate they will be using almost a fifth (18%) of this income, or £3,700, to support the finances of younger family members.

This equates to an average £311 per month – although one in eight (12%) retirees contribute £500 or more each month, which equates to £6,000 per year.

The findings, based on a sample of 1,000 people expecting to retire during 2020, showed that around 28% allow their family to live with them rent-free, while 24% give them regular cash to cover everyday living costs, and 15% put money towards supporting their grandchildren.

Another 15% of potential retirees said they have already helped to fund a deposit or put money towards the purchase of a property – a figure which Key suggested has shown a recent increase with the introduction of the stamp duty holiday.

“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,” said Key CEO, Will Hale.
 
“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.”

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