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The “sandwich generation” – those simultaneously providing support to young children and ageing parents – are reducing pension contributions and postponing retirement as they struggle to support financially both children and parents.
New research from Rathbones, one of the UK’s leading wealth and asset management groups, shows that more than one fifth (20%) in this cohort in the North East and Yorkshire and the Humber, typically older millennials and Generation X, are either currently or expect to be funding both their children’s university costs and day-to-day living and care expenses for ageing parents.
This balancing act is taking a significant toll with nearly two thirds (62%) in the region saying it is putting significant pressure on their finances.
As a result, many are being forced to scale back their spending. Nearly two fifths (39%) have cut holidays and one quarter (25%) have put home improvement plans on hold.
The impact extends well beyond lifestyle choices and is increasingly reshaping long-term planning and retirement outlooks:
- One quarter (25%) have reduced pension contributions
- More than two fifths (45%) have cut back on long-term savings and investments
- 79% now expect their retirement plans to be affected, with 47% delaying retirement by at least three years.
Chris Bartlett, Senior Financial Planning Director in Newcastle, said: “For the sandwich generation, long-term financial planning is increasingly about compromise. Those in the North East and Yorkshire can have a particularly difficult balance. Not only has earning potential in the region been traditionally lower than other parts of the country, ill health in older people can be more prevalent due to the industrial history of the area. With life expectancies extending, people are living longer but less healthy lives which may demand higher care costs. Coupled with youth and graduate unemployment, trying to prioritise immediate needs can come at the expense of longer-term financial security.
“Too often, this results in difficult financial trade-offs as those in the sandwich generation try to simultaneously support both younger and older family members.
“The fact that so many are considering or have already reduced pension contributions or delayed retirement highlights just how real this pressure has become.
“Even once they reach retirement, these concerns don’t disappear. Many people find themselves holding back on spending the pension they have spent their career building due to fears about the potential cost of education and later-life care.”
