The number of families with two retired generations is set to exceed one million in the next 10 years meaning retirement incomes will need to stretch even further.
Research by St James’s Place found the growth rate of multi-retiree families is increasing faster than previously predicted.
By 2029, 963,000 families will have more than one retired generation, an 18 per cent increase on the 813,000 multi-retiree families that exist currently.
While 1.4mn families are expected to have more than one retired generation by 2044.
According to SJP over the next 20 years, there will be between 60,000-100,000 more families than initially expected with more than one generation retired.
SJP has said retirement income will need to stretch across generations as 55 per cent of future retirees expect to provide financial support in retirement to other generations, compared to 37 per cent of current retirees.
Future retirees are also expecting to provide financial support to other generations through paying for everyday living costs, buying a house or paying off a mortgage or paying for childcare.
Claire Trott, divisional director for retirement and holistic planning at St. James’s Place, said the next generation of retirees cannot expect to follow the same path as those currently in retirement.
“There is a lot of pressure on people’s finances currently, and so building sufficient funds for your future whilst also supporting other generations may not be the priority and can feel daunting.
“In addition to this, future retirees are increasingly expecting to financially support others once retired, and retirement income is having to stretch in multiple directions. In order to do this, our approach to retirement planning must change.
“Putting in place the right plans at an early stage will allow greater opportunity to build wealth over time and leave behind as much as possible when you’re gone, without making unnecessary sacrifices along the way. Seeking professional advice can help you navigate these plans, giving you and your loved ones more security in future,” she added.
To ensure they can financially support their loved ones once retired, many future retirees are planning to take “significant action”.
Including working in retirement to supplement their income, delaying retirement to build a bigger pot, accessing pension pot early and reducing the amount they are able to pass on in inheritance.
alina.khan@ft.com
