Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • October 2015
10

'Overgenerous' parents risk leaving themselves short of capital

Open-access content Tuesday 6th October 2015 — updated 5.50pm, Wednesday 29th April 2020

Parents and grandparents who give money to their grown-up children and grandchildren risk compromising their own standard of living by being “overgenerous”.

2

Based on a survey of 1,019 people aged 55 and over, Investec Wealth & Investment said 32% of respondents gave or planned to give money to their offspring at an average of £5,026 a year.

Of those, 18% planned to take advantage of pension freedoms by withdrawing cash from their pension pots.

A total of one in five respondents felt they were "giving away too much" while 11% admitted to having to cut back on their lifestyle to afford their generosity. 

The biggest cutbacks made include travel, cited by 50% of people, and meals out (42%). A further 39% gave up home improvement plans while 24% had to cut back on clothes. Another 21% compromised on hobbies while 11% reduced food shopping.

In addition, 3% of respondents had to delay retirement to help finance the younger generation.

Chris Aitken, head of financial planning at Investec Wealth & Investment said: "Generosity has its limits and we would strongly advise people to stick to what they can afford without it affecting their own quality of life. This means planning to have enough capital to enjoy a long and active retirement, not forgetting that they may also need to factor in the cost of long term care.

"It is a concern that recent pension freedoms could result in some grandparents gifting too much of their retirement pot without considering their potential longevity. Anyone considering using their pension pot in this way should seek financial advice first."

This article appeared in our October 2015 issue of The Actuary.
Click here to view this issue
Filed in:
10
Topics:
Pensions

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ