- £8.2bn UK-wide has been shifted from the over 50s to family members since the start of the pandemic1
- One in four (25%) supported their family members financially at some point during the pandemic, giving £1,300 on average each
- 2020 saw an increase of 44% in the number of over 50s lending money to family members, compared to the previous year
- This led to over half (54%) of Gen Xers and Baby Boomers raiding their savings
The over 50s have lent a total of £8.2 billion to relatives to support them since the start of the pandemic.
Research from financial services company, OneFamily, found that while the under 30s2 have been most impacted financially by the pandemic, the unsung heroes of the crisis appear to be their parents and grandparents.
One in four (25%) over 50s have provided financial support to their family members since the start of the Coronavirus pandemic, with £1,298 being lent on average per person during that time3. Forty-four percent said that they have lent more money this year than the last.
The data showed that close family was at the top of the chart for receiving funds, with those over 50s who lent money saying they did so to help their sons (39%) and daughters (45%). Female family members seemed to have been the most affected by the pandemic’s squeeze on finances.
Seeing younger generations suffer a decrease in income (34%) was the key reason given for this intergenerational lending, with family members getting furloughed (18%) or losing their jobs (14%) also key factors.
But this lending didn’t come without consequences – 44% said they put a strain on finances in order to lend money to family, with almost one in four (21%) admitting to having felt pressure to step in and help members financially.
People over 50 have been withdrawing money from savings accounts (53%) and their current accounts (37%) in a bid to financially prop up their families. Credit cards also didn’t remain untouched, with older generations resorting (5%) to raiding them to help their loved ones, and some (2%) of the over 50s even had to sell their belongings to be able to get out some extra cash.
Matthew Ellis from OneFamily Advice said:
“When we think about the pandemic’s financial effects, we think of the Millennials, who have been some of the most severely impacted. However, as our research shows, the over 50s have felt a great pressure to support their families too.
“Whether they have dipped into their savings, taken money from ISAs or even sold their personal belongings, Generation X and Baby Boomers have been an important pillar in supporting younger generations over the past year.
“We know that the impacts of the pandemic will be felt for some time, and I would encourage people to seek help and get advice if they find that they are in financial difficulties.
“For homeowners releasing the wealth that’s tied up in their property might be one solution – allowing a living inheritance at the time when family members are most in need, without impacting on day-to-day finances. In some instances, it’s also possible to make a payment towards the interest each month, preventing a roll-up of the borrowing to reduce the impact on the inheritance that younger generations will receive.”
To find out more about OneFamily Advice visit: onefamily.com/equity-release