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More than a million families are expected to have two generations living in retirement by 2034, new figures show.
Currently, about 813,000 multi-retiree families exist in the UK. However, this is set to increase by 32 per cent over the next 10 years, which means retirement incomes will need to stretch further.
Nearly 1.4 million families are expected to contain more than one retired generation by 2044.
Some 55 per cent of future retirees expect to have to provide financial support in retirement to other generations – compared to just 33 per cent of current retirees – according to a study from financial firm St James’ Place.
People retiring in the future are also moving their plans for later life, in order to focus on financially supporting others. Data show that 14 per cent plan to work in retirement to supplement income, with 12 per cent delaying retirement entirely to build a bigger pension pot.
The analysis found that the growth rate of multi-retiree families is faster than previously predicted, which means that retirement finances are likely need to stretch even further.
There are currently 813,000 families with multi-generational retirees, a figure that is 100,000 than first predicted back in 2018.
Over the next 20 years, there will be 60,000 to 100,000 more families than initially expected with more than one generation retirement.
As a result, future retirees are expecting to help out with the finances when they get older.
Some 22 per cent expect to pay for everyday living costs, while 16 per cent are thinking of paying off a mortgage or buying a house for someone.
Claire Trott, divisional director for retirement and holistic planning at St James’s Place, said that the way “we need to think about planning for the future” has “fundamentally shifted.”
She added that the next generation of retirees “can’t expect to follow the same path as those currently in retirement.”
“There is a lot of pressure on people’s finances currently, and so building sufficient funds for your future whilst also supporting other generations may not be the priority and can feel daunting.
“In addition to this, future retirees are increasingly expecting to financially support others once retired, and retirement income is having to stretch in multiple directions.
“Putting in place the right plans at an early stage will allow greater opportunity to build wealth over time and leave behind as much as possible when you’re gone, without making unnecessary sacrifices along the way.”
