The Generous Generation or the Sandwich Generation, describes a growing group of people juggling multiple caring roles – assisting elderly parents and looking after their children. Some may face double or triple-decker caregiving layers, providing care to grandparents or grandchildren.
Club ‘sandwich’ is no picnic
Providing physical, emotional, and financial support to two or more generations of relatives brings challenges.
Caring responsibilities inevitably leave less time for activities that contribute to good mental health, such as exercise, healthy eating, rest, sleep, quality time with a partner, and social life. Our resources can feel stretched.
Many in their 50s report struggling with their finances, with more than a quarter saying they are worse off than they expected to be at this time in their lives. It’s a growing trend.
Caring for elderly relatives may include dealing with routine daily tasks, helping with cooking, cleaning, organising services and transportation to and from appointments. Often it can be financial in nature, helping with paying bills and taxes or making investment decisions. Among those aged 55-59, a SunLife report suggests that 4% provide financial support to their elderly parents.
In addition to elderly relative care, between the ages of 50 and 80, there’s a 1 in 2 chance you’ll continue to provide an element of financial support to your children.
Being a member of the sandwich generation is likely to be bad for your health and your wealth.
Taking positive action
- Financial planning
We’re living longer, and later life may not be as healthy and carefree as we’d like. With increased life expectancy, we experience more age-related diseases and a higher incidence of dementia. The social care system can’t provide all the care that ageing family members need, and loved ones may need to step in.
Memory loss and dementia can make elderly relatives more susceptible to financial exploitation and erratic decision-making. The sandwich generation will be planning for their retirement and long-term care alongside trying to safeguard their parent’s or grandparents’ financial position. Taking sound financial advice at this life stage is crucial.
- The Boomerang Generation
For many, relying on their parents’ generosity for longer than they’d like is the only way to save enough for a deposit on a first home or flat. The Office of National Statistics reports a 46% increase in 20 to 34-year-olds living with their parents since 1999. This group of young adults includes the Boomerang Generation who’ve lived independently whilst studying and then returned to the family home to reduce their outgoings. The financial impact of your adult child’s return may be relatively modest, but both generations are likely to find unexpected living arrangements stressful.
According to Legal and General, if the “Bank of Mum and Dad” were a mortgage lender, it would be the 9th biggest in the UK, contributing 26% of funds to the housing market.
When considering helping the next generation to get on the property ladder, you have plenty of options. You’ll need to decide if your contribution is a loan or a gift. If you give your child financial assistance, you have no control over what happens to the money once it’s theirs. The choice between making gifts and loans to your family needs specialist advice from a financial professional.
- Property wealth
The sandwich generation tends to own their home. Where a cash injection is needed, downsizing and equity release are two options, but both require careful consideration.
How can I help you?
As a chartered financial planner, my role is to look at a range of financial products and services to meet your aims as part of an overall strategy. Making financial decisions in isolation can result in unexpected and unintended consequences.
If you’d like to review your financial plans, call me. I’d love to help.
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