The Sandwich Generation – are you feeling the squeeze?
Are you a part of, or soon to be a part of, the ever-growing generation of people responsible for caring for their own children as well as ageing parents? When we last wrote about this topic, we had focused on the ‘Gen Xs’ who are between their mid-40s and 60s and how this situation could be impacting their retirement planning. A couple of short years later, accelerated no doubt by the cost of living crisis, it’s an issue that continues to spread further across age groups with ‘millennials’ between their late 20s and early 40s now joining the ‘sandwich generation’ club in droves. As a result, this is leading to some worrying statistics.
According to recent research*:
21% of UK workers consider themselves part of the ‘sandwich generation’
An estimated 6 million people in the UK workforce (over 1 in 5 workers) have dual caring responsibilities
Among the sandwich generation, more than 1 in 3 people felt a toll on their mental health, while 29% found it a financial strain
21% in the sandwich generation say their employer does not offer support to balance work and home responsibilities
Clearly, the impact of these pressures can take a heavy toll both financially and personally. Here are some ideas that may help lessen some of the short and long-term struggles.
Drawing boundaries and taking care of yourself
We appreciate that this is easier said than done, but as the saying goes, you can’t pour from an empty cup. It is imperative that you enforce some boundaries so that you can prioritise some time for yourself. For parents that need your support during the day it can also be tempting to reduce your working hours or leave your job altogether. But, as well as forgoing income, you could lose valuable benefits like pension, life insurance and health benefits offered by your employer. The long-term cost can be high and could end up having a significant impact on your own position in later life. As an alternative, you could consider adult day care or delegate more to other family members which leads me to…
Family help
Are there others in your family who can share some of the support with you? These can be difficult conversations to have but it can take a weight off your shoulders if other relatives can commit to some time or some financial support. Your children can also be a drain on your resources. If your older children have debts or need to get their careers on track, paying for them to have financial or career coaching can be a more valuable investment than simply subsidising them. If they are earning an income, it’s perfectly reasonable to ask them to pay their way and contribute towards the household, as well as doing their fair share of cooking, cleaning and laundry for the whole household.
Getting a financial plan in place
At the moment, rising costs are a real issue. Make sure you’re claiming all the relevant benefits – both for you and your dependants. Those with personal and nursing care needs are likely to qualify for Attendance Allowance. If they’re under 65, they should qualify for a Personal Independence Payment. For children under 16, make sure you’re claiming child benefit and if you’re paying for childcare, you can get tax breaks to reduce the cost -see https://www.gov.uk/tax-free-childcare for more.
For the longer term, you may want to investigate alternative solutions such as an Immediate Care Plan. This provides a regular income for life to pay for care, in exchange for an upfront, normally non-returnable, investment. Equity Release is another option but, as with all financial solutions, it is important to assess whether or not it will be the right fit for your personal circumstances.
If your parents need care, a review of their savings and investments would be wise. Their need for income will increase significantly so it is important that their investments are structured to support this. If your circumstances are complex, a Financial Planner will be able to help you here. We can help you to assess what financial strategies will work for you so that you are prepared for whatever might be coming down the road.
Planning for the future
Those who have experienced the pressures of being a part of the sandwich generation are likely to not want to put their own children in a similar position down the line. If you don’t want to rely on your children for your future care, it’s important to think about how this cost will be covered. At BFP, we work with all of our clients to ensure that these types of scenarios are planned for. So whatever life has in store for you, we’re here to provide the peace of mind that comes with having a bespoke and comprehensive financial plan in place.
*According to a new Opinium poll commissioned by leading UK employee benefits provider, Unum.
