Adult professionals are more dependent on their parents for a financial lifeline than ever before, as over half in the age range 35-45 declare they rely on their inheritance to finance their retirement planning.
These are the conclusions of the charity Elizabeth Finn Care, which specialises in assisting professional people in need of financial and emotional support due to changes in their circumstances.
The charity compared the expectations of two groups, consisting of professionals in the above age range, and a group representing the parental generation of these professionals (i.e. people aged 65-75 with children).
Of the professionals surveyed, 51% said they would encounter financial problems if they did not receive their expected inheritance. Three in 5 said they were counting on receiving between 71% and 100% of their parents’ wealth.
The reality is likely to be very different, however, as only 27% of the parents’ group declared they would be in a position to bequeath such a large portion of their estate.
Elizabeth Finn’s research has also uncovered a widespread lack of understanding among the professionals of the value of the state pension and the cost of care in old age, with 55% declaring they believed their state pension would cover the cost of a nursing home bed.
The basic state pension currently pays £95.25 per week, compared with an average cost of £540 per week for residential care, the charity said.
The conclusion was that reliance on inherited money as part of retirement planning is a false expectation, and provision for retirement through a personal pension, or other investments, is essential.
*Source: YouGov survey for Elizabeth Finn Care of 1051 professionals aged 35-45, and 539 adults aged 65-75 with children
