According to stats in the UK, adults are waiting longer to have children. The average age of a first time parent is now around 30 yrs.
Reasons for this could be that it takes young professionals longer to get on their feet and be financially stable. They are focusing on careers and establishing themselves, buying property and getting married later in life.
Although having children later in life means that parents are more financially stable and able to provide for all their children’s needs, there are downsides to this theory.
• As childcare expenses accumulate, disposable income drops
• Less money will be spent on savings which could potentially lead to a retirement shortfall
• During their 50’s and empty nest phase when they should be settling mortgages and saving more for retirement, parents will still be paying tertiary education fees or deposits for children’s first homes
• This could see debt still being paid off well into their 60’s and 70’s when they should be enjoying their retirement
‘Our figures show that as people get older, they’re increasingly likely to make extra payments into their workplace pensions – and in their 50s, 57 per cent of them are doing so. If they have the expense of children at this stage, it’s less likely they’ll have the cash available to set aside.’ – Dailymail.co.uk
These financial commitments later in life, could lead to a generation of financially strained pensioners that would ultimately put more pressure on government for support.
To add insult to injury, older parents in the sandwich generation (40-70 yrs.) might also be assisting their parents with expenses.
Below are examples of options that could potentially help
• Start saving earlier for retirement and factor this expense into your budget
• Consider taking out education savings plans for your children to ease the burden of university fees, which allows you to still focus on retirement contributions
• Savings plans or rainy-day savings funds could buffer the cost of deposits for first homes, ‘gap years’ or any unforeseen expenses that could cut into your retirement contributions
• Teach your children to save from a young age so that they can be financially independent
Speak to your deVere Acuma consultant about the various savings options available to help ease the financial burdens of childcare and education. [email protected]
Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.
Acuma’s Public Relations Department deals with all areas of the media and external communications including international, national, regional, local, trade, consumer, print, broadcast, social and online. The Department aims to provide a helpful service to journalists, broadcasters and editors, amongst others, and reply to all media enquiries, including urgent enquiries out of hours, within agreed deadlines. Our press office does not have access to client details and will not be able to assist with individual client enquiries. Please contact Head of Media and Public Relations for deVere Group on [email protected] or call +44 2071220925.