Family pressures (and the impact on pension savings)

A report from the Centre for the Modern Family out last week presents some interesting — and perhaps rather worrying — findings.

The report focuses on the changing shape and expectations of the UK family unit. Perhaps the principal change is that people are living longer, and therefore their retirement savings need to go further (quite a lot further in fact, as male life expectancy has increased by an entire decade since 1970).

So it has become ever more important to have adequate retirement savings. Yet the report also suggests that some savers are now feeling pressurised by the new pension freedoms.Twenty-seven per cent of Britons believe that savers will be put under pressure to use pensions savings to help struggling family members — and if they do that how will they fund their own retirement?

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Of course, many expect to receive an inheritance to help with their retirement savings and planning — yet this option also appears to be diminishing with only nine per cent of those surveyed expecting to pass on their home to their children. This is a very low figure, and probably reflects a combination of circumstances (longer retirements, low levels of retirement savings and an increasing need to fund for long-term care).

So this report may be a useful wake-up call to many — and certainly highlights the need for both greater pension savings throughout working life and better financial education as well.