Are you in generation sandwich?

New research has found that more than half of all over 55s financially support either their children, grandchildren or parents, and sometimes all three at once.
We look at what you can do if you find yourself in ‘generation sandwich’ with financial pressures from above and below.
We’ve all heard about generation X, Y and now Z, convenient shorthand for different groups of young people, loved by journalists and social commentators. At Continuum, we prefer to think of our clients as individuals – even if these broad classifications can sometimes be useful.
But there is another, and older generation that may be facing financial challenges. The latest analysis from over 50s insurance specialists SunLife has shown that 51% of people in their 50s, 60s, 70s and 80s are still financially supporting their children – while others support elderly parents. This is generation Sandwich, financially squeezed from above and below.
If you are in it, you may be in need of our help.

Financial pressures from above and below?

What is going on? Greater life expectancy has seen elderly parents living rather longer than anyone – themselves included – had anticipated. The increase in life expectancy of nearly 20 years since the 1960s means that many are have outlived the provisions they made for their old age. This has meant that growing numbers of children support parents whose finances were not sufficiently resilient to cover the costs of unexpectedly long life, especially if long term care is involved.

At the same time, those children have adult children of their own – who in the current economic climate may still be living at home, or reliant on the Bank of Mum and Dad to help with the costs of a first home, or of grandchildren.

Whatever the causes, the research shows that one in four people in their 50s are not nearly as financially comfortable as they thought they’d be. The question is, what can be done about it?

Start looking to the future

There are plenty of options for building wealth if you start early enough. If you are still in your 30s or 40s, you might need to budget for the care of both older and younger generations in the future. Sitting down with a Continuum financial adviser could help you see what sums are likely to be required, and the most appropriate ways to provide them. ISA investment might be one solution to build a tax-free lump sum. Another might be an additional pension plan.

Whatever you choose, if your family obligations are not as onerous as you thought, with some financial planning you may be able to look forward to a wealthier future.

Look to your own needs

Money can only be spent once – if it is used to provide for elderly parents’ care, it won’t be there for your own in later life. So whatever stage you are at, you need to look at your own plans to avoid becoming a burden on your own children.

At Continuum, we can look at all the financial and family factors with you.  With cashflow forecasting we can help you see the financial consequences for yourself of supporting your family – and the best ways to provide it.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.

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Book an initial consultation with one of our independent financial advisers or call us on 0345 643 0770 if you would like to discuss further.



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