Over half of UK adults expect to support their parents financially in their retirement.
Fresh research by Aegon has shown that younger generations of adults may no longer be able to rely on the so-called ‘Bank of Mum and Dad’ as patterns of wealth across generations evolve.
The trend of 20- and 30-year-olds being financially supported by their parents is set to go into reverse – as a clear majority are now expecting to financially support their parents as they get older.
The research, tied in with Aegon’s 2024 edition of its Second 50 report, which launches today, shows that trends in generational wealth will change how financially self-sufficient people may be in retirement and their ability to support younger generations.
Findings include:
- Two-thirds of adults admit to benefitting from the 'Bank of Mum and Dad' when they were younger.
- 55% of all age groups of adults with living parents support or expect to support their parents financially in their retirement.
- Adult children are covering expenses for their parents, with 38% regularly paying for dinners out and 25% helping to cover everyday bills.
- Less than half (46%) of 45 to 54-year-olds are upbeat about their parents' financial prospects. This drops to only 2% of 18 to 24-year-olds.
Steven Cameron, Pensions Director at Aegon, said:
“Two-thirds of people say they’ve benefitted from the phenomenon we often call the ‘Bank of Mum and Dad’, but Aegon’s fresh research shows that the tables may be turning.
“More than half of adults with living parents are already, or anticipate that they will be, the ones stepping in to provide financial support to their parents as they journey to and through retirement.
“This research, along with our latest Second 50 report which publishes today, shows that there is a generational trend when it comes to who will be financially comfortable in retirement and which generations may need help.
“Crucially, there are stark demographic differences. Those aged between ages 45 and 54 are most upbeat about their parents’ financial prospects – with 46% saying they believe their parents have the finances to support themselves through retirement. But this drops to just 2% for those in the 18-24 age bracket.
“For some, parental financial help extends well into adulthood. 37% of people say the last time they turned to the ‘Bank of Mum and Dad’ was when they were in their twenties, but one-in-seven (14 %) continued to receive support into their thirties. Looking to the future, a third (34%) of people express concerns about their parents' financial situation in retirement, worrying whether they'll have enough money to get by comfortably.
“The reasons for this are complex. For those in their 50s, their parents in their 70s and beyond may be benefitting from gold-plated final salary pensions. But these are now dwindling in the private sector, and current and future generations of retirees will likely have less generous ‘defined contribution’ pensions. Parents of those in their 50s may well have also benefitted from more affordable house prices when they were younger. Again, this has changed with parents of younger adults often not faring so well.
“Our research shows that younger generations are aware that the Bank of Mum and Dad may at some point ‘flip’
“Generation by generation, we are on average living longer and living to 100 is now a real possibility. These findings are a reminder that you can’t assume your later life will look anything like that of your parents. For many, their Second 50 will be uncharted territory and individuals need to look at their own unique circumstances to plan to make the most of later life.
“Aegon’s Second 50 report is a great starting point to scan the developing landscape of later life. We’ve identified ‘Five Fundamentals’ which shape our Second 50.
“The flipping of the Bank of Mum and Dad is relevant to two of these – Wealth and Family situation. These – alongside Work, Health and Wellbeing – all need focused thought so that we can enjoy what for many will be longer, more varied lives.”
Methodology
Survey conducted by Research Without Barriers (RWB) between 2-4 September 2024, comprising of 1,048 UK adults.
The Second 50: Navigating a multi-stage life
The Second 50: Navigating a multi-stage life is Aegon's research report into how living longer is changing the ways that we live, work, save and retire. The second edition launched on 8 October 2024, featuring new analysis and insights into how the UK can make the most of a longer, more varied later life.
The full report can be found at aegon.co.uk/second50
Case studies relating to the Second 50 may be available on request.
About Aegon
In the UK, Aegon offers pension and investment solutions to over 4 million customers. Aegon employs over 2,000 people in the UK and together with around 500 people employed by Atos, we serve the needs of our customers. Figures correct as at 31/12/2023. More information on aegon.co.uk
Aegon UK is part of the wider Aegon Group, an international financial services holding company. Aegon’s ambition is to build leading businesses that offer their customers investment, protection, and retirement solutions. Aegon’s portfolio of businesses includes fully owned businesses in the United States and United Kingdom, and a global asset manager. Aegon also creates value by combining its international expertise with strong local partners via insurance joint-ventures in Spain & Portugal, China, and Brazil, and via asset management partnerships in France and China. In addition, Aegon owns a Bermuda-based life insurer and generates value via a strategic shareholding in a market leading Dutch insurance and pensions company. Aegon’s purpose of helping people live their best lives runs through all its activities. As a leading global investor and employer, Aegon seeks to have a positive impact by addressing critical environmental and societal issues, with a focus on climate change and inclusion & diversity. Aegon is headquartered in The Hague, the Netherlands, domiciled in Bermuda, and listed on Euronext Amsterdam and the New York Stock Exchange.
Aegon's purpose of helping people live their best lives runs through all its activities. As a leading global investor and employer, Aegon seeks to have a positive impact by addressing critical environmental and societal issues, with a focus on climate change and inclusion & diversity. Aegon is headquartered in The Hague, the Netherlands, and listed on Euronext Amsterdam and the New York Stock Exchange. More information can be found at aegon.com
The information in this press release is intended solely for journalists and shouldn’t be relied upon by any other persons to make financial decisions.