Just 28% of this year’s retirees think they can afford to leave a financial legacy
The percentage of retirees who say they can afford to leave something to their children has fallen to it’s lowest level for six years with just 28% saying they will be able to afford to do so.
Research by Prudential reveals that more than a third are already helping their families to the tune of £250 per month on average.
The research also states that those retiring in 2016 are providing multi-generational support, propping up children as well as grandchildren.
Prudential’s ninth annual report on financial plans states the number of people who believe they will leave something behind has dropped from 52% in 2011 to just 28% in 2016.
Among this year’s retirees those who do feel they’ll be able to leave an inheritance expect to leave an average of £191,000, a figure which is nearly unchanged. However Prudential’s findings also show a potential reason for the decline, and highlight that retirees are making sure their families don’t go without. 35% of the Class of 2016 are already providing regular handouts to family worth an average of nearly £250 each month with 13%giving away more than £500 a month.
Stan Russell, a retirement income expert at Prudential said: “With the average retirement now lasting nearly 20 years, people retiring in 2016 who provide support to their families could hand over an average of £60,000 during their retirement. With this in mind it is perhaps unsurprising that the numbers of people expecting to leave an inheritance is on the decline.
“This kind of financial support will make a significant dent in all but the largest of retirement pots, but it can be overlooked by many when planning for life after work. A consultation with a professional financial adviser should help many people when planning their retirement finances and all the financial commitments they will need to cover.”
Money being provided by retirees to family members is most likely to be used for everyday living costs – eight per cent give money on a regular basis to expenses such as food or travel. A further 8% make one-off contributions to the cost of a luxury purchase like a new car, a holiday or a new television.
7% have provided a deposit for a house for a family member, and 6% helping to cover the cost of university. However, the pressure to maintain income means that 23% plan to take paid employment in retirement and 23% plan to sell the family home to boost income.