Bank of gran granddad supporting their kids 240 a month

Such is the UK population's dependence on their parents for cash that the Bank of Mum and Dad is still open for business well after it becomes the Bank of Gran and Granddad, research has suggested.

Two in five of those who are planning on retiring this year are still providing financial support to their kids, giving them on average £240-a-month, a study by Prudential has revealed.

Around 11 per cent of these people are forking out more than £500 each month to their kids, raising concerns that it is putting the parents at risk as their incomes drop in retirement.

Prudential's Class of 2013 research into financial support provided to families.

Prudential's Vince Smith Hughes said: 'With nearly half of those expecting to retire this year still providing financial support to their families, retirement income is increasingly becoming a family affair.

'Issues in the housing and jobs market clearly make it financially difficult for adult children to leave home and most parents are happy to support them where possible.

'If they can afford the support there's no issue, but with expected retirement incomes at a five-year low, any additional outgoings could cause financial strain.'

One in every seven of those surveyed by Prudential still have children over the age of 25 living with them, while almost a third will retire having a least one dependant - including grandchildren - living with them.

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It comes at a time of financial pressures in the retirement market, which has seen incomes squeezed by low annuity rates and changes to tax-free allowances for pensioners.

 

Even though think-tank The Fabian Society reported on Monday that the income gap between pensioners and workers has closed significantly in favour of pensioners in the last 30 years, Prudential claims that someone retiring this year can expect an average annual income of £15,300, some £3,400 less than those who retired in 2008.

Contributing to their families' everyday living expenses - such as food and travel - is the most common form of handout from the current crop of pending pensioners, just ahead of helping with non-essential items such as holidays, new TVs or even cars.

London is the location where parents are most commonly providing financial support, ahead of Wales and the West Midlands.

Bank of Gran and Granddad: Ten per cent of those retiring this year will provide money for their grandchildren's upkeep.

In spite of the added cost of supporting their kids, just under half of retirees still predict they will be able to leave them a decent inheritance.

And although they are already benefiting from withdrawals from the Bank of Mum and Dad, some 37 per cent of parents believe their children expect an inheritance when they die.

Of those not providing support to their kids, 30 per cent have families but are not giving them cash, while the remaining 30 per cent do not have dependants.