Here’s a nice twist on the idea of the Bank of Mum and Dad – soon we’ll be experiencing the Bank of Kids.
New research from MetLife shows that one in six of over-40s questioned in their survey worry that they will be forced to ask their children for financial support when they stop working.
This is as a result of parents not having saved enough for a comfortable retirement; instead of bailing out their children, they worry that the tables will be turned.
The research identifies that nearly half (45%) worry about the financial risks they have to take to guarantee an income for life when they stop work. Three quarters say that having a guaranteed level of income in retirement is important to them.
More than half, says the research, of over-40s retirement savers believe they are on track with their retirement savings, rising to 76% among the over-55s.
However, 30% of over-40s admit they are behind on their retirement saving. What’s more, even among the over-55s (the first generation to benefit from pension freedoms), around 16% admit they have not saved enough yet.
MetLife points out that this age bracket are being squeezed by a combination of low long-term interest rates and ongoing investment market volatility as well as narrowing choices on retirement income.
Wealth Management Director at MetLife UK Simon Massey said: “Parents will have worked hard to support their children so perhaps they should feel entitled to rely on them if they need financial support in retirement.
“However, it is a bit of a role reversal when it’s retired parents banking on their children for money. It will also have an impact on how much the children can save for their own retirement which in turn can cause problems.
“Planning for the long-term and reducing the risk of running out of money in retirement is one of the key challenges for savers. Guarantees can help people approach their retirement with greater certainty and confidence and a Guaranteed Drawdown solution provides the peace of mind that comes with a guaranteed level of income for life in retirement while retaining full access to your money. This can help mitigate the risk of needing to call on children’s help.”
