Pensions used to prop up household income

One in three over 55s (36%) use money from their pensions to help support their children and grandchildren and one in ten (12%) dip into their savings and investments in order to contribute to the family household income according to new research.

The latest findings come from leading savings provider Birmingham Midshires’ Life 2 campaign, which explores the issues affecting the over 55s. The research reveals that, far from older relatives being a financial burden on their families, pensioners are willing to forfeit some of their own future comfort – but perhaps also their kids’ inheritance - to provide significant financial support to younger relatives.

On average, 12 per cent of the monthly outgoings of parents and grandparents aged over 55 is used to help care for older children and grandchildren – equating to £123 per month.

Over 55s in the Midlands contribute the highest proportion of their income to the family ‘pot’, with 16 per cent of their monthly expenditure going towards living costs for their family. Meanwhile, those in the South West will set aside just six per cent of their outgoings to help their children and grandchildren.

However, pensioners in the North East are the most self-sacrificing. Five per cent will take on a part time job in order to help with the family expenses, compared to a national average of one per cent.

When it comes to how they feel about subsidising the rest of the family, a generous one in two parents and grandparents (49%) say they are ‘entirely happy’ to help out financially and a further third (31%) claim to be ‘moderately’ happy to dig deep. However, six per cent of the over 55s say that they feel obliged to contribute to the family finances although they do not feel happy about doing so.

Jason Robinson, director of savings operations at Birmingham Midshires said: “These findings suggest that the over 55s are actually using their pensions and savings to provide a financial lifeline to younger family members – at the same time as adjusting to enormous change in their own income and lifestyle.”