A mature couple does their paperwork and pays their bills at home. They are using digital tablets in the kitchen.
Research shows that nearly 6 million millennials rely on their parents’ wealth to fund their retirement.
Four in 10 people aged 28 to 43 say they would not be able to retire without financial support from their parents, the survey found. More than half say their only source of income in retirement will be cash from their parents.
One in five people are looking forward to the money they will inherit, and four have already decided how to spend the money.
This comes after savers were warned they face a retirement crisis in the 2040s.
The state pension age is scheduled to rise to 68 in 2037, making the oldest millennial age 56. Currently, the minimum annual amount you need to retire is £14,400, but the Pensions and Lifetime Savings Association (PLSA) says you need £31,300 a year. A modest retirement requires £43,100 and a ‘comfortable’ retirement requires £43,100.
But as life expectancy continues to rise and pensioners live longer on their retirement savings, the pressure on them to save will increase.
“In today’s economic climate, many millennials consider their parents’ savings and pension funds to be an important source of funding for their lives,” said Karina Chambers, a pension expert at Money Farm, the asset management company that commissioned the survey. It’s obvious that we’re relying on them.” Post-retirement planning. ”
“This increased dependence highlights the economic hurdles young people face, including skyrocketing childcare costs, inflation and rising costs of living, including a competitive housing market,” he said. .
Pension provider Phoenix has predicted a retirement crisis in the early 2040s as millennials continue to not save enough.
It is predicted that from 2025 to 2060, more than half of defined contribution pension plan participants with no guaranteed income will experience financial hardship.
Three out of five Millennials struggle to save enough for retirement. Life events such as buying a home, giving birth, and changing jobs are putting even more pressure on pension savings.
“If people don’t realign their savings after they overcome short-term financial difficulties, they could end up retiring with far less than they currently have,” said Patrick Thomson, head of research and policy at Phoenix Insights. There is a risk that it will happen.” I was expecting it. ”
He said: “As many as 17 million people are not saving enough for the retirement they expect, so it is important that we take steps to address the savings gap wherever possible.”
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Younger generations are forced to rely on their mothers and fathers’ banks for long-term support in the face of rising costs of living.
An employee earning an average wage of £35,100 would have to borrow more than eight times their salary to buy the average £290,000 home.
As a result, more than 42% of properties purchased this year were purchased with the help of moms and dads, an analysis by Legal & General found earlier this year. This is predicted to reach £11.3 billion by 2026.
The number of the “club sandwich” generation, which supports three generations other than their own, is also increasing. This could be a recently retired person who is supporting parents, children, and grandchildren, or someone who has living grandparents, parents, and children.
By 2029, 963,000 households will contain more than one retiree, an 18% increase from this year, according to analysis by asset management firm St James’s Place.
In 10 years, this number is expected to jump to more than 1,077,000 households, an increase of 32% from 2024, which equates to 264,000 households.
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