New research from Standard Life has found that almost one third of parents (30%) with children under 18 are finding their financial situation difficult, which compares to 22% of people without children.
This comes during a second full year of high inflation, with the cost of essentials like food and household bills still outpacing income rises for many. For parents this is combined with increasing expenses related to childcare, schooling, kids’ activities and rising housing costs related to sharp interest rate rises – all contributing to the financial strain that families are likely to face.
Standard Life’s research also found that 69% worry that they’re not saving enough now for when they’re older whilst 65% worry about spending too much now in case they run out of money in the future.
As families grow, so do the demands on household budgets. This can lead to increasing financial pressure on parents as they grapple with the reality that providing a stable and nurturing environment for their children requires careful financial planning and strategic decision-making. Of course, parents are likely to prioritise their finances to focus on their children’s needs but should seek to make sure that they maximise the opportunity they have to save for their own futures.
Dean Butler, Managing Director for Retail Direct at Standard Life, part of Phoenix Group said “Try not to lose sight of your own financial goals amongst the mayhem of parenting as even the smallest of saving will help the family’s long-term financial wellbeing. Many of us can relate to the pressures that parents face juggling immediate financial priorities with trying to save for the future, be that for a particular goal or into a pension. It’s important however that parents don’t sacrifice their own saving and retirement goals entirely to focus solely on the here and now.”
“Retirement may seem a long way down the road but thanks to the power of compound investment growth, the earlier you start saving the more you will have when you get there. Even contributing small amounts to your pension all adds up over time – our calculations found that contributing just 1% more than the minimum required under automatic enrolment could lead to £58,000 more in retirement*. In some good news for parents with very young children, there could soon be some respite from the monthly squeeze after the Chancellor announced an expansion of free childcare for one and two-year olds in the Budget – hopefully, this will give parents the opportunity to take a breath and start to build a plan for their financial futures.”