The "sandwich generation"
An aging population, high house prices and the growing trend of having children later in life is causing more and more Brits to join the 'sandwich generation', where they find themselves supporting both younger family members and aging loved ones.
According to research by LV=, around one in three British adults are in the so-called 'stretched middle', giving financial support to either their offspring or their parents. However, a growing number of UK adults are finding themselves looking after both ends of the spectrum, with financial responsibilities stretching from parents to children, and in some cases, even grandchildren.
The latest research suggests that there are now one million members of the UK's sandwich generation, a figure that is likely to grow as the population continues to age and house prices continue to rise out of the reach of first-time buyers. As a result, this demographic is coming under increasing pressure to keep earning in order to care for family members, old and young alike.
Covering the costs
According to the research, the main areas of financial support provided by the sandwich generation include paying for food and household bills (54%), paying off debts (54%), paying for home renovations (23%), providing medical care (32%) and covering education fees (11%).
This financial support can be costly and could make a huge dent in the household budget. On average, younger relatives spend £1,367 a year to provide older family members with financial support, with one-third of respondents helping out with the cost of care and 4 in 10 supplementing an older loved one's retirement income.
Adult children are proving to be no less a drain on the purse, with more than 1 in 10 respondents claiming that their adult children rely upon them for monetary help. Parents reported that, on average, they were spending £6,411 every year to contribute towards the bills (36%), accommodation costs (30%) and debts (28%) of adult children aged 22 years or older.
As a result, over half of those surveyed said that they were finding the financial pressure challenging, while 1 in 4 claimed that they had had to take out a loan to support other family members.
The costs are not only financial – time is also becoming a precious commodity for this demographic.
The research found that 8% of respondents were having to work longer hours or had taken up a second job in order to keep up with their financial obligations, while nearly half (44%) of those interviewed have to balance working full-time with providing around 19 hours of care a week for elderly relatives. Time was found to be in even shorter supply among those looking after younger relations, with respondents claiming to spend 39 hours looking after younger family members.
Keeping the money coming in
As financial demands from both young and old continue, or even increase, members of the sandwich generation are clearly going to be left feeling frazzled and lighter of pocket for a significant amount of time. These financial responsibilities mean that the onus is on them to keep earning so that they can continue to provide the support their relations need. Consequently, members of the sandwich generation need to ring-fence their income and protect themselves from any future shortages – and this means getting the right insurance in place.
"Nobody wants to think about the possibility of getting ill or being made redundant, however, the reality is that some of us will be off work for a period of time at some point in our career," commented Richard Rowney, LV= Life and Pensions managing director. "Having a contingency plan, such as income protection, in place offers you peace of mind that if you fell ill or were made redundant, you would receive a regular income that would enable you to carry on supporting yourself and your loved ones."
Getting insurance
If you are a member of the sandwich generation, the stretched middle or you just want to secure your income, it's important to get cover with the right insurance. Income protection, critical illness cover and life insurance can all help to safeguard your finances and ensure that your family and relatives will have the financial support they need.
You can start searching for the right type of cover by using the help of an independent protection specialist, who will talk through your options with you and recommend the right solution. They will ensure that the protection you choose will provide you with enough financial security to keep you and your family in the black, should the worst happen.