21% of retirees expect to support grandchildren during retirement, Skipton finds
Analysis found that giving grandchildren £250 a month could mean an extra £58,000 is needed in pension savings.
Skipton Building Society found that 21% of adults expect to give financial support to their grandchildren during retirement.
Those planning to support their grandchildren said they expect to start at age 65.
48% of working adults said they are worried about running out of money in retirement.
Skipton Building Society modelled pension savings needed for a moderate standard of living in later life.
It found that someone would need around £370,000 in pension savings to support a moderate retirement from age 67 to age 88.
Giving grandchildren £250 a month could mean an extra £58,000 is needed in pension savings, taking the total to about £428,000.
Retirees giving £500 a month may need an extra £116,000, according to analysis.
Helen McGinty, head of financial advice distribution at Skipton Building Society, said: “While many families will naturally want to support their grandchildren where they can, whether that’s contributing to education costs, childcare, clothing or simply giving regular financial support, it’s important people don’t assume this support will simply fit within their existing retirement plans.
“These gestures can make a real difference to family members, but these costs need to be planned in for, as even relatively modest amounts of regular support can add tens of thousands of pounds to the retirement savings needed over a lifetime.
“Also, the answer isn’t always just saving more into a pension.”
McGinty added: “For some people, they may want to review how their assets are structured, plan for the tax implications of gifting and exploring where other products such as junior ISAs may help support younger generations.
“What’s right for one family won’t necessarily be right for another, which is why planning ahead is so important.
“With changes to inheritance tax rules bringing pensions more firmly into estate planning in 2027, people should consider looking at their future finances holistically.”
She said: “Worryingly, a third of people don’t know how much they’re contributing to their pensions each month, so the earlier you plan your pensions alongside any additional assets, the more options and flexibility you’ll have later on.
“It’s also important to consider how best to spread your retirement pot across your lifetime, especially as health and lifestyle needs change.
“Understanding what you’ll need to fund your own lifestyle first can help ensure you’re able to support loved ones without compromising your financial security.”
She added: “Small steps taken today can make a huge difference to how comfortably – and confidently – you’re able to live in the future.”
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