- £8.2bn UK-wide has been shifted from 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
- Continued financial pressure may necessitate more financial advice for this age group – as over half (54%) of Gen Xers and Baby Boomers have had to dip into their savings. Equity release may be an alternative source of capital that they wish to explore.
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, parents and grandparents have been dipping into their savings to help them.
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.
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. As a result, there is likely to be an increased need for financial advice and potentially measures such as equity release to free up funds as the pandemic wears on.
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.
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.
Iain Clark, OneFamily’s Director of Lending and Insurance 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.
“Now, more than ever, Generation X and Baby Boomers need to have expert guidance and support from advisers. The past year has had a great impact on everyone’s lives, and even if the country is expected to start recovering economically from the pandemic’s effects, the strain on people’s finances is still expected to be felt for the months to come.
“Our research suggests that people are taking out credit, dipping into their ISAs and even selling belongings to support their families through these tough times. Financial advice is going to be absolutely crucial for people so that they can find the right product for their needs.
“Options such as 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’s Lifetime Mortgages, visit: www.onefamilyadviser.com/lifetime-mortgages
Notes to Editors
Unless otherwise stated, all research conducted by Opinium, on behalf of OneFamily, between 29th January and 1st February 2021, among a nationally representative sample of 2,000 UK adults aged 50+
- According to ONS data, the number of people over 50 years old in the UK is 25,197,069. 25% of these people have lent or given money to their family members, equating to 6,299,267 people. Our research shows that the average lent among those over 50s who lent or gave a sum of money since the start of the pandemic stands at £1,298. This means the total across the UK being lent by over 50s within families is £8,176,448,890 (25,197,069 x 25% x £1,298)
- Previous research from OneFamily, conducted between 29th January and 1st February 2021, among a nationally representative sample of 1,003 UK adults aged 18-30, showed that 15% of 18-30s had been furloughed, compared with 10% of the general population; while 6% of 18-30s had been made redundant, versus 3% of the general population
- Adults aged 50+ were asked approximately how much money they gave in total to family members in order to help support them during the crisis – £1,298.30 represents the average per person among those who lent or gave any money.