Baby Boomers worry Millennial financial struggles will hurt them too as care costs bite

Posted in: Corporate

  • Nearly half (46%)¹ of Baby Boomers don’t think their family could support them when they are older
  • 68%² of over-55s think life is harder than ever for younger generations
  • Among Baby Boomers, 85%³ are mortgage free, just 6% of over 65s currently rent their property4

Almost half of Baby Boomers (46%) are concerned that the financial struggles of younger generations could mean that their families won’t be able to support them as they age.

The research by financial services company, OneFamily, found that sixty-eight percent of Baby Boomers worry that life is much harder for their Generation X children and Millennial grandchildren than when they were younger.

Rising housing costs and hefty student loans repayments, combined with a lack of job certainty following the Covid-19 pandemic, makes saving for a mortgage deposit and getting on the housing ladder very difficult for Millennials.

As a result, their Generation X parents may be supporting stay-at-home offspring for longer whilst they are still paying for their own mortgage. So, they don’t have the spare capacity to help their retired parents with their care costs.

But while 43% of over-60s have moved to a smaller property to unlock money tied up in their home, 20% of downsizers said they felt disappointed with their overall return7.

Matthew Ellis, Head of Direct Advice at OneFamily said,

“It’s not easy for anyone right now, and uncertainty as a result of the Covid-19 pandemic has just made life even tougher.

“It’s especially difficult for the older generation, who may be having to contemplate the upheaval of downsizing to finance the care they need at home or perhaps moving to a care home.

“However, 75% of older people own their property outright8.  For some of these people, releasing the wealth in their property could be an alternative solution that would enable them to cover care costs whilst remaining in the familiarity of their existing home.

“Equity release has changed in recent years, with lower interest rates and features such as the no negative equity guarantee and the opportunity to make monthly interest payments, so that the amount borrowed doesn’t roll-up.

“However, this isn’t the right solution for everyone and it’s important to gain proper advice on all the implications.”

OneFamily provides independent, whole of market equity release advice.  It encourages family members to be a part of this process, and offers virtual face to face adviser meetings which can be joined by other members of the family.

Notes to Editors:

Under current guidance, property owners are not entitled to help with the cost of moving into a care home from their local council5. Meanwhile, recent figures show that the average cost of a residential care home in the UK is £33,852 a year, rising to over £47,320 a year with nursing care6.

Unless otherwise stated, all figures in this press release come from a survey of 2,000 UK Adults aged 55+ conducted between 3/4/20 and 7/4/20 by Opinium on behalf of OneFamily

¹ Opinium Apr 2020 survey asked over 55s whether they agree with the statement “I don’t believe my family could support me financially when I get older if I become dependent on them.”

46% strongly agreed or agreed

2 Opinium Apr 2020 survey asked over 55s whether they agree with the statement “It’s harder than ever for younger generations financially.” 68% strongly agreed or agreed

³ Opinium Apr 2020 survey asked over 55s whether they have a mortgage. 85% responded “no”.

4 ONS Data from ‘Living longer: changes in housing tenure over time’ (Feb 2020)

5 According to page ‘Paying for your own care (self-funding)’

6 Figures come from ‘Laing and Buisson Care of Older People Report 30th Edition 2019’

7 Research from a survey among 1,000 UK adults aged 60+ by Savanta on behalf of OneFamily in May 2019

8 ONS Data from ‘Living longer: changes in housing tenure over time’ (Feb 2020)