UK retirees are giving an average of £4,522 a year in financial support to relatives and towards education costs for children and grandchildren, according to new research from wealth manager Quilter.
The figure is made up of £2,272 spent directly helping relatives and another £2,250 going towards education. The amount being spent supporting family has jumped by 81% compared with last year and now accounts for around one in every six pounds retirees spend.
Concerns over standard of living
The generosity comes as many retirees are also concerned about how comfortable their own finances will be in the future. Six in 10 retirees said they were worried about being able to maintain their current standard of living over the next year.
This is despite 69% of individuals and 74% of households saying they are currently satisfied with their retirement income.
Spending patterns and report findings
Quilter's second annual Retirement Lifestyle Report looked at the finances of 5,002 UK retirees, with analysis carried out by the Centre for Economics and Business Research. It found retirees spend an average of £27,159 each year, around £5,000 more than last year.
Holidays were the biggest individual expense at £2,973 a year, followed by home improvements at £2,776.
Steven Levin, chief executive of Quilter, said retirees were increasingly thinking about their families as well as their own needs. He said: "Many retirees are choosing to help children and grandchildren through significant life events, whether that’s helping with education, getting onto the property ladder or navigating periods of financial pressure."
Tax changes affecting decisions
The research also found that changes to pension and inheritance tax rules are affecting the decisions some retirees make with their money. Almost two in five, 39%, said the current political environment was affecting their inheritance tax planning.
Meanwhile, 29% said they planned to spend more of their pension savings during their lifetime, while 26% expected to gift more of their pension wealth. From April 2027, unused pension funds and death benefits are due to be brought into estates for inheritance tax purposes, which could lead to more families thinking about how and when they pass on their wealth.
