Some 74 per cent of high net worth individuals are currently providing financial support to their families.
The Saltus Wealth Index report found 70 per cent of HNWIs were financially supporting their adult children with 80 per cent supporting adult grandchildren.
It also found on average this group are providing more than £10,000 a year to their families with 25 per cent having started to provide support as a direct result of the cost-of-living crisis.
Money is mostly being given to help with mortgage payments, household bills, groceries, transport costs and higher education fees.
Saltus had asked 2,000 people with £250,000 or more of investable assets in December 2023.
For those supporting their adult grandchildren, 22 per cent said they were sourcing this from excess income.
However, 23 per cent have sold housing assets and 20 per cent have reduced pension contributions – rising to 28 per cent for those who have only started supporting as a result of the cost-of-living crisis.
Mike Stimpson, partner at Saltus, said: “What is striking from this research is how many HNWIs are dipping into pension pots and other bigger and longer-term investments in order to be able to provide this support.
“The high numbers of people reducing pension contributions or tapping into housing equity to help cover their families’ expenses is alarming as it could lead to knock-on impacts on their plans for retirement.”
The research also found a mere 9 per cent of respondents said their current financial climate had not impacted them at all.
Most HNWIs have made changes such as reducing their pension contributions (13 per cent), borrowing money (13 per cent) and 12 per cent have sold their property to adjust to rising costs.
Although some have had to make sacrifices to their finances, respondents said they were still willing to provide support to their families even if it meant making further sacrifices.
Dr Michael Peacey, senior lecturer at the University of Bristol, said: “Data from the latest research show that the behavioural responses to the cost-of-living crisis have been varied among HNWIs and their families.
“For some it may be things like cutting down on luxury items or switching to cheaper supermarkets but for others the decisions are more significant and long-term, such as delaying decisions about having children, starting businesses, or retiring.”
alina.khan@ft.com
