The financial plight of the over 40s approaching in retirement has been revealed in full by a new study.
Dubbed the ‘sandwich generation’ because they look after children as well as older relatives, the 2.4 million people aged between 40 and 60 years old are finding their finances are under stress when they need money to save for their own later years.
No money to save
Financial firm LV= asked this age group how they are coping with saving for retirement and found that:
- Few bother taking financial advice, as 40% believe they do not earn enough money to merit the move
- The average expected retirement income from a pension is just £260 a month
- Over half (52%) are worried that a serious illness could strike them or a partner during the next 12 months
- Another 54% cannot afford to save for retirement
- Almost a third are concerned that they might die and leave their family without any income or that a partner may die
On average, the health and financial worries of the sandwich generation were twice the average of the rest of the population.
More than a third (37%) have less than £125 disposable income each month, with nearly half (46%) explaining children are a constant source of unexpected expenses.
On average, the sandwich generation has around £60,000 to fund retirement and expect their savings to last around 20 years.
Huge financial obligations
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 has 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.”
