A study by St. James's Place into intergenerational wealth and retirement planning has revealed that the number of families with multiple generations in retirement at the same time will exceed one million in the next 20 years, meaning people may need to start reassessing how they plan for the later stages of life.
The study, which analysed ONS data1 and included research among 4,000 adults in the UK2, forecasts there will be 1.2 million families containing more than one retired generation by 2039, rising from 624,000 families today. As the table below shows, it is anticipated that today’s number will grow by 13% to 704,000 in the next five years, with growth becoming steadily more dramatic as time goes on.
While, for many, retirement may still seem a long way off, the research reveals that people are already thinking about what the future may bring. A quarter (24%) of future retirees expect to provide financial support in retirement to someone other than their current partner, such as children, grandchildren, a former partner or a partner’s children. This compares with 7% of current retirees who already do so, and highlights how retirement income will increasingly need to stretch across generations within often complex family structures.
The most common way those not retired at the moment anticipate providing financial support to other generations when they retire is everyday living costs (17%), followed by school or university fees (14%) and childcare (12%). Over a fifth (22%) feel either pressurised or worried by providing or the prospect of providing financial help to other generations.
1 Estimating the number of families with multiple retired generations relies on looking at the age of children of the eldest age groups and projecting how changing demographics will impact these figures. We know approximately how many older age groups have a child aged 65 and above currently, and we have applied those percentages to the ONS projections of increased numbers of adults aged 80-89 and 90+, to ascertain future numbers of families with more than one generation in retirement.
2 Opinium Research carried out an online survey of 4,000 UK adults aged 18+ from 18 to 24 April 2019. Results have been weighted to representative criteria.