‘Sandwich’ generation

Not having enough money for retirement is the biggest concern

Average life expectancy has generally been increasing, and for the ‘sandwich’ generation, saving for their retirement is clearly a big concern – and with plans to contribute financially to support their children and parents, it’s perhaps no wonder.

A survey by the Association of Investment Companies[1] of the sandwich generation aged 35–55 who have elderly parents and children and a minimum household income of £50k found that half (49%) said not having enough money for retirement was their biggest financial concern. This was followed by their children’s school/university fees (36%) and not being able to help family members financially (23%).

Saving for retirement
Three quarters (75%) of people interviewed said they had either a final salary, defined benefit pension or a defined contribution pension from their employer, and 47% said they had a personal defined contribution pension and/or a Self-Invested Personal Pension (SIPP) arranged individually. While having this pension provision, nearly half (48%) of people said they still expect any money they currently have saved outside their pension to be used for retirement.

Research revealed that, on average, the sandwich generation are planning to save £419,248 for retirement with one fifth (21%) of those surveyed saying they were planning on saving between £250,001 and £500,000 for their retirement. On average, men are planning to save over £100,000 more than women for their retirement – £463,922 in comparison to £361,329. Interestingly, a quarter (25%) said they didn’t know how much they were planning to save.

Financial contributions
Unfortunately, it’s not just their own retirement that the sandwich generation are concerned about when it comes to their finances. Nearly a third (31%) of people said they were currently contributing financially to support their child/children after they finished school, and a further 46% were planning to contribute. The average amount the sandwich generation expect to contribute is £40,088. Interestingly though, almost half (46%) think their children will be better off financially when they reach their age.

While half (52%) of those surveyed aren’t planning or currently contributing financially to help their parents or parents-in-law, those who are (34%) said the average amount they expect to contribute is £18,378, which would go towards bills or expenses, medical expenses and/or a retirement home.

Saving habits
When it came to their saving habits, an overwhelming number (66%) said they use a cash savings account and/or a Cash ISA (59%) to save money, with a Stocks & Shares ISA the third most popular choice (35%).

While most (50%) expect any savings (excluding pension savings) they have to be used for ‘a rainy day’, retirement (48%) was the second
most popular option followed by a holiday (42%) and property (32%). Of those who have money saved, most started saving in their 20s and 30s, but a quarter (25%) have been saving since childhood.

Financial market
When asked what they would invest in if they had money to put aside for ten years and could only invest in one thing, property came out on top (44%), followed by stocks and shares (27%). 49% of people said they felt confident about investing in the financial market, but men are considerably more confident about this than women (60% versus 36%).

Source data:
[1] The ‘sandwich’ generation research was conducted by Opinium from 22 August to 5 September 2017 among 2,011 UK parents aged 35–55, who have a minimum household income of £50k, at least one parent/parent-in-law living and who have or would consider having a Stocks & Shares ISA.


Content of the articles featured in this publication is for your general information and use only and is not intended to address your particular requirements or constitute a full and authoritative statement of the law. They should not be relied upon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles.For more information please visit www.goldminemedia.co.uk