West Brom customers have told us they would be prepared to give up part of their retirement fund to lend a helping hand financially to a younger family member or close friend.
Responding to our latest Customer Panel survey, almost one in two (47%) were willing to offer a proportion of their savings to the next generation. Most would want to see this money used to either help youngsters get on the property ladder, pay for higher education fees or meet the cost of a wedding.
Rising house prices have seen the so-called ‘Bank of Mum and Dad’ play a more prominent role nationally by contributing to planned expenditure by younger people.
In 2017, the older generation spent an estimated £6.5bn* on helping family and friends buy property. Around 13% of Customer Panel members revealed they had already put part of their retirement savings towards aiding other person’s financial wellbeing.
David Taylor, the West Brom’s Head of Products, said: “Parents or family members have traditionally made financial contributions to the next generation to assist with major purchases or life events and this has become even more widespread in recent years.
“Those approaching or already enjoying retirement are only too aware that young people will find it difficult to set enough money aside for something like a house deposit and are therefore willing to offer support by dipping into their own savings.”
Elsewhere, confidence among West Brom customers in funding their retirement is higher than the national average. Findings from the 2017 Wealth and Assets Survey conducted by the Office for National Statistics showed that just 42% of non-retirees felt they knew enough about pensions to make a decision about saving for retirement. This compares to 61% from our Customer Panel survey.
Further research from the Wealth and Assets Survey showed that 40% of people believe a work pension is the safest method of saving for retirement. This is supported by the Panel, with two thirds planning to fund their retirement the same way.
Work pensions are closely followed by the state pension and then private schemes, while around a fifth of customers (17%) say they intend to downsize their current property and use the proceeds from the sale to boost their retirement pot.
In terms of activities and what people plan to do during retirement, it isn’t all about recreation and relaxation. In fact 54% of our survey respondents who are considering retiring in the next 15 years told us they would like to continue working in some capacity.
The next most popular planned pastimes were taking frequent holidays (51%), spending more time with family and friends (51%) and carrying out home improvements (44%).
Finally we asked members of our Customer Panel how they view their current financial circumstances. Three quarters consider themselves satisfied, a figure which increases further for people aged 70 and over, while 57% believe that their financial circumstances are faring better than those of the younger generation.
Would you like to participate in future research activities and surveys? If you’re a West Brom member with a savings account or Society mortgage then you can apply to join our Customer Panel. Please click here for full details and an online application form.
* Legal & General, The Bank of Mum and Dad report 2017