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Retired and supporting your family financially? You’re not alone

5 min read 17 May 24

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When times are hard, it makes sense that families will look at ways they can support each other, both emotionally and financially. And if you’re one of the many retirees supporting family and friends financially, you’re not alone.

With financial pressures such as day-to-day living costs fuelled by inflation, expensive property and education fees, there’s a growing expectation for retirees to give their grown-up children, family members and friends some financial help.

Although most retirees will be in their 50s, 60s and 70s or more, and less likely to have dependent children, research by The Wisdom Council in association with M&G shows that nearly 40% of those surveyed support grown-up children, a spouse or partner, parent, elderly relative or friend*.

Helping with financial pressures

It is fair to say that many people have been struggling with rising costs over the last few years, it’s perhaps not surprising that most of that support has gone towards day-to-day living costs, followed by help with buying a house, wedding costs, education or university fees. Advancing an inheritance and care or medical costs were other major reasons for providing support, too.*

Thankfully, helping their children is something many retirees are happy about, with almost half (47%)* saying it’s very important or essential to be able to do that throughout their lives.

Spending on your loved ones

If helping your children and other loved ones throughout your lifetime is important to you, there are some things to carefully consider.

Your money has to last as long as you do so that you can support yourself throughout your retirement, however long that might be. If the money you’re giving to loved ones was an unexpected outgoing then do you know the impact that might have on your own financial goals?

A financial adviser can help you put plans in place to make your money work harder.  They can recommend the best ways to use tax allowances and try to minimise the amount of tax you may incur. For example, this could be achieved through estate planning (which aims to reduce or, where possible, avoid inheritance tax) or looking at your pension and other savings to check they’re being used in the most tax-efficient ways. 

A financial adviser will look at your individual needs and circumstances and put together a recommendation to help you plan for a financially secure future.

Passing on an inheritance matters to most

Around three-quarters (76%) of those surveyed expect to leave an inheritance of some kind to their children *, according to The Wisdom Council. They want the next generation – and sometimes wider family – to benefit from financial support after they’ve gone, as well as during their lifetime. And that means having a plan to ensure you have enough money left.

Practical tips to help pass on your money

  • Make sure you’ve got an up-to-date will that reflects your wishes.
  • It’s important to consider any pension you may leave behind and whether you have a beneficiary who will receive some or all of your pension after you die. Pensions aren’t normally covered by a will, so you’ll need to fill in a ‘Nomination of Beneficiary’ form with your pension provider – or providers if you have more than one pension – to make sure any pension savings go to the people you'd want them to. You can normally do this online.
  • Review your beneficiaries regularly and make sure all address details are up to date, especially if your circumstances change, for example, if you have more children or get divorced.
  • Those you leave your pension savings to normally pay income tax, so what they take and when they take it can make a big difference to how much money they actually get.
  • An adviser can give you guidance on the best way to pass your money and pension savings on in the most tax-efficient way, including managing any inheritance tax (IHT) liabilities. You can find an adviser that’s right for you here.

* The Great Retirement report by the Wisdom Council, in association with M&G, Jan 2023

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