16/07/12 - ‘Squeezed generation’ pays almost a fifth of wages to support parents and children
A new report out today (16 July) from The Co-operative Bank, uncovers a financially squeezed generation of adults who in the current economic climate are struggling to provide financial support to both their parents and children.
The first in a series of comprehensive reports by The Co-operative Bank on ‘Modern Families and Households’ reveals that with modern trends such as having children later in life and people living longer, there is a squeezed generation in the middle who are simultaneously financing both their children and parents*
The findings show that currently just over 1 in 7 parents (15%), who have children in their household, are also at the same time providing financial support to their parents.
The research highlights that those parents who have children at home are under 18 years old are hardest hit financially, paying out on average £3,505 a year to support their children and parents. This equates to almost a fifth of the average UK take home salary**.
And even when the kids reach 18 years of age, rising costs of property and living are ensuring the ‘bank of mum and dad’, still remains firmly open, with these parents paying £2,543 a year to finance both generations.
The main areas of financial support provided to parents include support with everyday living costs, bill payments and excursions.
|Top 10 areas in which adults support their parents||Based on population of adults who financially support their parents - * of whom provide financial help in the following areas|
|1||Everyday living - eg food||45%|
|2||Contributed to bill payments||36%|
|3||Trips out / excursions etc||27%|
|4||Large purchases - eg white goods||25%|
|6||Emergency home repairs||23%|
|7||Car / transport bills||23%|
|8||Energy / heating costs||21%|
|9||Contirbuted to rent / mortgage||21%|
|10||Helped to pay off their debts||20%|
The report also shows that in the current economic climate, two-thirds (65%) of this squeezed population feel the pressure of supporting both sets of generations is putting their finances under strain.
And according to the results, over half (58%) of this squeezed generation believe that the financial burden of supporting parents and children is preventing them having the lifestyle they might previously have envisaged having at their age.
Robin Taylor, Head of Banking at The Co-operative comments “The report shows how the changing nature of modern families and cost pressures of living in the current economic climate, are placing real financial pressures on the shoulders of today’s middle generation”
“Compared with previous generations, the higher costs of housing, providing care for the elderly and everyday living, have resulted in a squeezed generation, who are having to re-adjust their views of the lifestyle they thought they would have been enjoying at their age.”Modern Families and Households Report 2012 (Pdf - 0.8b)
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Notes to Editors
*Research carried out by ICM in May 2012, and June 2012 on behalf of The Co-operative Bank amongst a geographically representative sample of over 2,000 adults.
** Average annual salary for full-time employees is now £26,200, according to Annual Survey of Hours and Earnings (November 2011) – average take home pay based on this equates to £20,149, and £3,505 as a proportion equates to over 17% of average take home pay
Notes to Editors
About The Co-operative Banking Group
The Co-operative Banking Group, is the banking and insurance arm of The Co-operative Group, which is the UK’s largest mutual business, owned not by private shareholders but by over six million consumers.
The Co-operative Group has 4,800 retail trading outlets, employs more than 100,000 people, and has an annual turnover of more than £13bn.
It is the UK’s fifth biggest food retailer, the leading convenience store operator and a major financial services provider, operating The Co-operative Bank, Britannia and The Co-operative Insurance. Among its other businesses are the number one funeral services provider and one of Britain’s largest farming operations.
The Co-operative Banking Group is one of the largest and most highly diversified mutual businesses operating in both retail and corporate markets. As part of The Co-operative Group, the business is characterised by its unique ethical and member reward policies and very high levels of customer advocacy.The Co-operative Banking Group has £70 billion in assets, 12,000 staff and nine million customers. It has over 300 high street branches, 20 corporate banking centres and major presences in Manchester, Leek, London, Plymouth, Skelmersdale and Stockport. It is the only mutual organisation that enables its members to earn financial rewards for the products they hold, as well as giving them the opportunity to have a say in how the business is run.