The financial plight of the sandwich generation

Caught between an ageing population and becoming a parent later in life, the “sandwich generation” has been overlooked for years.

But the number of those looking after dependent children and their own ageing parents is soaring. And they are paying the price – not just emotionally, physically and professionally, but financially too – according to a new report from the Office for National Statistics (ONS) that highlights the problems of more than a million people stretched to breaking point.

Sandwich carers – those who support both sick, disabled or older relatives and dependent children – are more likely to report problems ranging from mental ill-health to struggling to cope financially compared with the general population.

Often described as “falling through the gaps”, their present sacrifices also dramatically increase the chances of becoming destitute in old age.

The cost of caring

As the average age for first time parents increases, parents are not only far older when their dependent children finally fly the nest but many may not actually leave until later than expected.

The cost of raising a child to 18 now comes in at more than £155,000 for couples, or more than £187,000 for lone parents, says Loughborough University’s Centre for Research in Social Policy. Even parents working full-time on the median UK wage fall 11 per cent to 15 per cent short in meeting those costs, the think tank calculates.

The longer the kids stay, the higher the bill climbs.

At the end of last year, research from Skipton Building Society found that about 2.7 million parents currently have grown-up children living at home. Only 40 per cent of those “tenants” are contributing financially.

The numbers are increasing too. Figures from the ONS suggest the number of 18- to 30-year-olds living with their parents has increased by 6 per cent in the last 10 years.

But those costs pale in comparison to the financial implications of supporting an elderly relative.

Two in five Britons are financially supporting their parents in later life or expect to, driven in large part by increased life expectancy and the knock-on implications for dementia and frailty problems.

By 2050, Age UK estimates that around 2 million people will be suffering from dementia.

But we are grossly underestimating what that looks like in financial terms.

A third of all UK adults believe the total cost of supporting elderly parents, paying care home fees, arranging home help or modifying their home will come in at somewhere between £1,000 and £5,000, according to research by insurance provider Vitality.

In reality, the average cost of looking after someone with dementia for just a year is £32,250. Over a lifetime, care costs could easily top £100,000 or more.

Risking the future

So not only are sandwich carers struggling for everyday cash now, but their position often means preparing for their own future is impossible.

The ONS figures found more than 40 per cent of carers were scraping by, finding life financially difficult, very difficult or “just about getting by” compared with just a quarter of the general population.

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With a similar 40 per cent reporting that caring prevents paid employment, this group will not only struggle to set aside any savings in a private pension, they will also struggle to qualify for the national insurance credits vital for their state pension.

Commenting on the ONS data, Steven Cameron, pensions director at Aegon, said: “A huge 1.3 million people in the UK find themselves increasingly stretched as they carry a dual responsibility of care for their children and sick, disabled or older relatives. As well as the toll this can have on work and life choices as well as on mental wellbeing, the impact on financial wellbeing is a significant concern.

“As our society continues to age, with many people living long into retirement, it’s critical that the whole issue of who and how care is provided and how it is paid for is properly debated. This data shows the huge amount of voluntary care being provided to our elderly alongside more formally recognised care provision.

“We hope the government’s promised deal for social care funding, which faces further delays amid Brexit planning, will allow people to plan ahead for their social care costs and ease both the time and financial burden the sandwich generation currently face.”

If you’re struggling with the responsibility of providing care, charities such as Carers UK offer help, advice and support.