Nine million providing financial support for older relatives

New research from Canada Life has revealed that one in six (16%) adults, equivalent to nearly 9 million people, currently provides financial support to older family members.

Financial advisers are seeing this trend emerge in their own client conversations.  More than a third (36%) say that providing financial support to older family members has become more frequent in recent years.

The findings underline the increasingly complex financial pressures facing families as people live longer. Traditional patterns of financial support are changing, with financial help no longer flowing solely from older to younger generations. Instead, many adults are stepping in to help parents and older relatives meet the cost of later life.

For those providing support, helping an older relative can add a long-term commitment to an already complex financial balancing act, alongside housing costs, childcare and saving for their own retirement. Against a challenging economic backdrop, this can add another consideration for families managing their financial priorities.

Nearly two thirds (61%) of those helping older relatives are contributing towards everyday living costs, highlighting growing concerns over retirement affordability and suggesting many older people’s incomes are falling short of the cost of a basic standard of living.

More than a third are helping to cover at-home care costs for a relative (35%) and a similar proportion are contributing towards property maintenance and repairs (33%).

One in ten adults are part of the ‘sandwich generation’, providing financial support to both older and younger family members, with 25 to 44-year-olds the age group most likely to be supporting relatives up and down the family tree.

When asked about intergenerational wealth in the context of increasing longevity, 87% of advisers agreed that it will be important for older people to share their plans with their family, and 94% agreed that it will be important for families to have open and honest conversations about plans for later life.

Rose St Louis, Chief Customer Officer, Canada Life said “Longer lives mean the traditional pattern of financial support flowing from older to younger generations is becoming less clear-cut.  Cost of living pressures and unpredictable care costs can mean older relatives find their income is not stretching to meet everyday expenses.

“Families will naturally want to support those they love, but this can place pressure on those in mid-life who may also be raising children, paying a mortgage and trying to build their own financial security for later life. Without a plan in place, there is a risk that financial pressures are passed from one generation to the next.

“For advisers, this means understanding both the financial and emotional toll these pressures can take on clients, and tailoring support accordingly. Where appropriate, bringing multiple generations into the planning conversation earlier can help families consider the choices ahead around retirement income, potential later life costs, and inheritance. With a joined-up view, families can put a plan in place that helps mitigate rushed decisions when an issue arises and reduces the likelihood of financial pressures being passed on unexpectedly.”

Top reasons for financially supporting older family members:

Everyday living costs	61%
Care costs in their own home	35%
Property maintenance and repairs	33%
Residential care home costs	29%
Specific major expenses e.g. cars, holidays	29%