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18 Apr 2018

Retirees give their families thousands of pounds every year

For many people, retirement does not necessarily mean an end to supporting their family.

New research from Prudential reveals that nearly a third (31%) of those planning to retire this year are giving family members financial support, handing out around £4,300 per year, increasing pressure on their own retirement plans and income.

On average they are providing financial support to three people.

More than half (56%) give money to their children, while 25% support their grandchildren. Another 8% help their parents, and a small proportion (2%) even give their grandparents financial assistance.

The findings come from Prudential´s Class of 2018 study which records the financial plans and aspirations of people planning to retire in the year ahead.

Taking all monthly payments into account, those planning to stop work this year expect to give their extended family £360 a month on average, while nearly one in five say the figure is over £500 a month.

The money tends to cover everyday living costs such as food and travel, according to 27% of those who give money monthly. However, 23% say they are providing financial support to help with university education fees and living costs and 22% say some of the cash is helping loved ones onto the property ladder.

Stan Russell, retirement income expert at Prudential, said: “Increasing financial pressure faced by people of all ages, such as the cost of university education and the rising cost of buying a home, means that providing financial support to family members continues well in to retirement.

“While it´s understandable so many people want to financially support family members, it is important to make sure they have enough money set aside themselves to cover their own living costs and don´t put their retirement at risk.

“Saving as much as possible as early as possible and seeking professional financial advice is crucial for those who don´t wish to risk feeling the pinch in their own finances by helping out family members.”

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