Supporting families costs average £3,700 a year for new retirees

Newly retired people financially supported their families with an average £3,700 during 2021, according to research published by Key Later Life Finance.

Despite the increasing strain on finances, Key’s findings revealed that more than a third of the newly retired (34%) provide financial support to their family.

The findings, based on a study among 1,000 people, revealed that on average, the newly retired are giving £307 a month to help family, which equates to nearly £3,700 a year, with 10% of those giving over £500 a month to family members or more than £6,000 a year.

With the average income in retirement £21,663, this means those planning to retire could end up spending around a sixth (17%) of it helping families, a “significant drain” on their retirement income, Key stated.

Reasons given for family funding varied in terms of regular support, with around 9% allowing their family to live with them rent free, while others give money towards the cost of their grandchildren’s upkeep (6%), give cash on a regular basis for everyday living costs (6%), or cover the cost of other essential outgoings (5%).

“Juggling your finances as you move between full-time employment and retirement can be a challenge – especially if you are supporting your wider family as well,” said CEO at Key Later Life Finance, Will Hale. “It is only natural that parents want to help whether it is with time, money or advice but it is important that they remember their own needs as well.

“Retirement should be an opportunity to relax and enjoy the hard work that you have put in over a lifetime.  However, your finances can be limited by the practical challenges of having a family, buying a house and living a modest lifestyle while at the same time trying to save into a pension. 

“This makes it more important than ever that parents consider all their assets at retirement – including their home – as this will not only allow them to improve their own finances but potentially provide more support to their families.”

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