Future families founded on fortune

Finances shape the family and will be crucial to holding them together by 2029, according to a new report by the Future Foundation for NS&I (National Savings and Investments).

The report, Families, Finance and the Future, suggests the existence of a new institution of British life - the ‘Financial Family' - a collaborative unit of close friends and family marked by financial interdependence. It does not simply show a steady flow of cash down the generations, or the ‘sandwich generation' arrangement observed in recent years, but also shows flows of money and advice, up and down the generations as well as between siblings.

The costs of living and care for the elderly are recognised as rising, and the report suggests that the traditional family unit is shifting - yet family ties will be stronger than ever, and people will rely much more on financial networks. By 2029, there will be more cohabiting couples, and more single-person households than married couples living together - so the Financial Family will be important even after the traditional family has declined.

The Financial Family was identified using new survey research, which assessed the response to attitudinal statements in the Financial Family index. Key findings include:

The majority of people felt financially responsible for family members (54%).

Almost three-quarters said current economic trouble meant families needed to support each other (70%), and

Most people feel comfortable discussing financial matters (55%) with close friends and family, or sharing financial tips and advice (60%).

Young people are more engaged with the Financial Family, with 50% of 16-24s identified as members of a Financial Family, compared to 30% of 25-34s and 20% of 35-44s. As this generation grows up, the Financial Family will become more and more widespread.

Technology will also mean that people are better equipped to share financial advice - but will also make it more important they do so. As the amount of information that tries to reach consumers increases, people will rely on the insights of their financial network to process this mass of information.

Barry Clark, Associate Director at the Future Foundation said: "We feel we've revealed a new way for people to look at British family life - and one that will become increasingly common. When we look at several demographic trends, like the rise of single-person households, the advance of technology and young people's involvement in financial matters, we can expect the Financial Family to be a very important feature in the future. The Financial Family is here to stay."

Tim Mack, Savings Spokesman at NS&I, said: "We started from an intuitive feeling that discussing money isn't taboo any more, but the results far exceeded our expectations. The research shows that the discussion of finances, and our relationship with money, extends beyond the traditional family."