Britain faces uncertain financial future with surge of retirees

British society is undergoing a significant shift as families with two generations of retirees become increasingly commonplace. According to consumer research by Friends Provident, increasing longevity means that 57% of retirees also have parents who are retired.

A third of these retirees are currently supporting their own retired parents financially or expect to in the future. Advances in medical technology and improved standards of living mean people are living longer, which could place a considerable drain on family finances. And with the proportion of people aged 65 and over projected to increase to 22% by 2031 (currently 16%), Britain could see more families with two generations of retirees in the future.

As this increased longevity begins to take effect, people will have to think more seriously about how to fund their retirement. People retiring today have additional financial responsibilities that previous generations may not have had; at least a fifth (18%) of retirees still have to pay their mortgage. This coupled with the possibility of having to support elderly relatives and the burden of funding their own retirement makes the prospect all the more financially challenging.

Martin Palmer, head of corporate pensions marketing at Friends Provident, said: "The retirement landscape is shifting. As we live longer, we're increasingly seeing two generations of retirees. This could have a huge impact on retirement funds. There is a very real possibility that today's 60 and 70-year olds in the UK are not only funding their own retirement but also helping their elderly parents out.

"Longer life expectancy means that not only do we have to make our pensions stretch further than one decade, but an inheritance to fund retirement could be a long way off or never arrive at all. In today's world people can no longer afford to rely on an inheritance to fund their retirement, but instead need to begin saving for it as early in life as possible and not leave it to future generations to pick up the pieces."