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Nearly half (45%) of people in Northern England who support both their children's education and ageing parents have cut back on long-term savings or investments to help their families, compared with 36% nationally, according to new research from Rathbones.
The research from one of the UK's leading wealth and asset management groups comes at a time when policymakers are increasingly focused on regional growth, devolution and expanding opportunities across Northern England. Yet the findings suggest many families in the North are making greater personal financial sacrifices than the national average in pursuit of those opportunities for future generations.
Three in 10 (30%) people in Northern England say the combined cost of supporting their children's education, whether through private school fees, university costs or both, and helping ageing parents financially has placed significant pressure on their finances, compared with 24% nationally. Meanwhile, 30% expect to retire later than originally planned because of these competing financial demands, versus 25% across the wider population.
Greg Winter, Senior Financial Planning Director based in Rathbones’ Liverpool office, said: "Families across Northern England are making significant investments in the next generation, often whilst also providing support to ageing parents. For many, education remains one of the most important routes to opportunity and social mobility.
"As policymakers increasingly focus on regional growth and expanding opportunity across the North, these findings highlight the role families continue to play in making those ambitions a reality. However, many are doing so at considerable personal cost. The fact that nearly half have reduced long-term savings or investments, and that many expect to retire later as a result, shows how the financial burden of supporting multiple generations is increasingly being absorbed by families themselves."
Cost of education weighing on retirement savings
The research suggests education costs alone are having a meaningful impact on families' long-term financial plans.
More than a quarter (28%) of people in Northern England say they have reduced pension contributions to help meet education costs, compared with 24% nationally. Meanwhile, 24% say funding education has placed significant pressure on their finances, versus 18% nationally, whilst a similar proportion (24%) say education costs have delayed their retirement plans, compared with 22% across the wider population.
The findings also highlight growing concerns about the relationship between wealth and opportunity. More than a third (36%) of people in Northern England strongly agree that rising education costs are making life chances increasingly dependent on family wealth, whilst 83% agree overall.
Despite the pressures, support for education remains strong. More than four in five (85%) people in Northern England say they would still encourage their child to attend university.
Pat Doig, Head of Rathbones’ Leeds office, said: “This data shows the challenges facing the ‘squeezed middle’ where rising bills and mortgages, alongside rising costs of childcare and education are forcing difficult choices between providing for one’s own retirement and future family financial security, or different education choices for their children now.
“It is encouraging that many families continue to prioritise education in our region, especially one home to several leading universities. Yet there is a clear warning in the data. If access to opportunity increasingly depends on a family's ability to fund it, there is a risk that social mobility becomes harder to achieve, particularly in regions where growth and opportunity are central policy priorities."
