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Families still trying to save for next generation despite cost of living crisis

UK households are increasingly worried about saving for the next generation but the cost of living is making it harder
UK households are increasingly worried about saving for the next generation but the cost of living is making it harder. Photo: Alecsandra Dragoi/Reuters

The vast majority of UK households are committed to saving enough money to help out the younger generations in their families even as the cost of living crisis hits their pockets.

Over three-quarters (77%) have said they are still planning for the financial wellbeing of the next generation, according to the Scottish Widows Future Finances index.

Given the current financial hardships amid record high inflation that is driving up prices all across the UK, 15% of households have expanded their plans to include a greater number of generations.

This could be include covering the care costs for elderly relatives as well as helping younger generations to get on the housing ladder or cover the costs of further education.

Read more: Cost of living: Prices of pasta and tea soar as inflation bites

Some 44% of households would consider one other generation in their long-term financial plans, with a further 27% expecting to account for two generations.

“The latest survey data tells us that UK households are clearly concerned about their financial outlook, but it’s positive to see that the tradition of passing a financial legacy to loved ones remains strong and has increased since a year ago,” Emma Watkins, managing director of retirement at Scottish Widows, said.

“But in addition to that, around one in seven households now feel they need to support other relatives too – this may include helping the younger generation with one-off big purchases or covering cost of care for the older family members – which is likely to further impact already downbeat perceptions towards future finances,” she added.

Read more: Black and Asian families worst affected by cost of living crisis

The cost of living crisis is also forcing workers to delay retirement. Compared with 12 months ago, around 11% of householders now plan to retire later, while 10% have increased their pension contributions in efforts to shape up their finances for their future.

Almost of third of those surveyed (28%) admitted they had no pension plans at all.

Watch: How to save money on a low income