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Millions of Brits fill pension gap for elderly relatives

13 June 2008 / by Rebecca Sargent
As more than half of the retired population are struggling to stretch their pensions in order to keep up with the soaring cost of living, more than 1.5 million British adults are stepping in to offer financial assistance to their elderly relatives.

Rising energy costs, food prices and other expenses, combined with a lack of preparing for the future are pushing up the number of retired people who are in pension poverty.

Research by Engage Mutual Assurance, into the changing financial relationship in British families has discovered that 1.7million people – almost 10 per cent of British adults – are helping retired relatives with the cost of living.

Of these, 22 per cent are contributing towards the cost of care for their parents, the same number are helping them with day-to-day expenses such as household bills and food shopping, and 33 per cent have taken their parents into their home, or that of a relative, to reduce the cost of living.

However, a quarter of Britons with parents aged 65 or older fear that they will not have the means to support their parents in retirement.

Of that quarter, 14 per cent say that they were worried that they cannot afford to pay for a care home for their parents, 11 per cent said they are concerned they will not be able to support their parents at all in retirement, nine per cent fear their parents cannot afford their own retirement, and eight per cent said they are afraid that their parents will support themselves through retirement by spending their children's inheritance.

Almost half of adults say that their parents will be able to fund their own retirement. A further five per cent said that their parents are considering equity release, freeing up cash from their property to pay for their golden years, and six per cent have downsized their home.

"As costs of living increase, retirees are finding it increasingly difficult to make ends meet." said Karl Elliott, spokesperson for Engage Mutual Assurance. "In hard times people often turn to family members for support and, as our research shows, this is the case for elderly relatives as well as young adults who are finding it increasingly difficult to disconnect themselves financially from their parents.

"With the size of Britain's retired population growing, and costs of living increasing, it is important that people save little and often towards their retirement in order to reduce the pressure on themselves and their family to make ends meet in old age."

© Fair Investment Company Ltd