One in six fears they’ll need money from their children in retirement

Forget the Bank of Mum and Dad – nearly one in six parents worry they will have to turn to their children for financial support in retirement, new Metlife research shows.
Some 16 per cent of over-40s with children are concerned that they will need to ask children for financial support as they will not have saved enough for a comfortable retirement by the time they stop work. Instead of bailing out their children they worry they will have to rely on them for financial support.
One of the major challenges facing retirement savers identified by the research is that nearly half (45%) worry about the financial risks they have to take to guarantee an income for life when they stop work.  Around three-quarters (75%) say having a guaranteed level of income in retirement is important to them.
The research found more than half (56%) of over-40s retirement savers believe they are on track with their retirement savings rising to more than three-quarters (76%) among the over-55s.

Not saved enough

But almost a third of over-40s admit they are behind on their retirement saving and even among the over-55s, who are the first generation to benefit from pension freedoms, around 16% admit they have not saved enough yet.

They are being squeezed by a combination of low long-term interest rates and ongoing investment market volatility as well as narrowing choices on retirement income.

MetLife is supporting moves to ensure savers understand the choices available to them and has launched a campaign to deliver Real Pension Freedom supported by advisers, with a focus on the valuable role guarantees can play in retirement.
Simon Massey, Wealth Management Director at MetLife UK said: “Parents will have worked hard to support their children so perhaps they should feel entitled to rely on them if they need financial support in retirement.
“However, it’s a bit of a role reversal when it’s retired parents banking on their children for money. It will also have an impact on how much the children can save for their own retirement which in turn can cause problems.
“Planning for the long-term and reducing the risk of running out of money in retirement is one of the key challenges for savers. Guarantees can help people approach their retirement with greater certainty and confidence and a Guaranteed Drawdown solution provides the peace of mind that comes with a guaranteed level of income for life in retirement while retaining full access to your money. This can help mitigate the risk of needing to call on children’s help.”

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