Money Matters: what does the 2023 Budget mean for you – and your parents?
Yes, you read the title of this article right. The recent budget announcement – with regards to the free childcare reform, whose purpose is to help people back into the workplace – could benefit your own parents in much the same way as it benefits you (and your finances).
Why? You don’t need us to tell you that grandparents up and down the country are instrumental in caring for their grandkids; you’ll know this anecdotally (via mums and dads at the nursery gates and/or your colleagues). You may even fall back on your own parents to help out.
After all, childcare can prove so expensive that many parents and guardians simply can’t afford to go back to work and sign their little one(s) up for a pre-school place.
At Unity Mutual, we’ve conducted a piece of research* surrounding this much-discussed issue, with this article being the latest in our ‘Money Matters’ series. Between 27 January and 2 February 2023 we surveyed 2,000 UK parents aged 50 and over.
Read on for our insights into why and how grandparents everywhere are helping their children progress their career while ensuring their child(ren) receives the care and support they need…
Time and Support
One quarter of respondents (with an even gender split) aged 50 and over currently spend up to 15 hours per week helping children and grandchildren, with Wales the most time-generous (17% dedicated up to 37.5 hours per week).
When it comes to how much this ‘Generous Generation’ spend supporting their kids, most (30% spend between £50 and £100 per month, with more than one in 10 (11%) offering more than £500 in funds per month.
With the Government now extending free childcare to support more parents returning to work after their parental leave ends, the recent budget reform could spell good news – and not just for Mums and Dads. Grandparents may also be able to look forward to saving money; working parents of all children over the age of nine months will be entitled to 30 hours of free childcare from September 2024.
Disposable Income
For those nearing retirement age, it wouldn’t be remiss to expect that disposable income could be reserved for socialising or holidays. Currently, though, almost one third (31%) of those who answered our survey say they spend up to a quarter of their disposable income on kids and grandkids, with almost a quarter (23%) saying the figure is nearer to a third of their spare cash.
A staggering 55% of those surveyed say they didn’t expect this would be the case, which could suggest that the financial strain on their own children is a desperately challenging sign of the times.
The cost-of-living crisis, of course, has a lot to answer for, with seven out of 10 people saying they faced greater financial pressures. Almost two thirds (63%) said they are less financially secure than their own parents, with two thirds (66%) of respondents saying they would sacrifice financial stability for children and grandchildren, though.
Challenges
Interestingly, one in 10 respondents said they never expect to stop helping their children and grandchildren, with 41% saying they think they will stop now – between the ages of 50 and 60.
‘What age will your kids be before you have to stop helping?’, was another question those surveyed were asked. Almost a quarter (24%) said never, while the largest group of people (44%) said between 20 and 30.
Almost half (40%) said they worried their kids would never be able to stand on their own two feet, while only 19% said they would turn down a child’s request for help.
How far would people go to help their kids financially? A third would take the clothes off their back (32%), while 14% have completely overhauled their retirement plans to help out. A staggering 64% said they wished they’d planned earlier to help their children, while almost half of people (43%) have spent up to £10,000 of their savings to ease financial pressure for their offspring.
A third of those whose children are still living in the family home due to finances say they worry they will never fly the nest. As a result of this, lack of alone time and expense for those who shared their home with their sons and daughters was almost tied (33 and 32%).
Over 50s are also sacrificing their own annual leave to look after grandkids, with almost half (42%) spending three weeks of annual leave per year.
Meanwhile, more than two thirds (68%) would use their spare cash on their kids, with one in five respondents (20%) saying their children’s financial future affects their wellbeing by keeping them up at night.
What’s the outlook?
For those who are scarifying time and money to help out family, the outlook may stay the same – in the short-time at least.
With more money allocated in the budget to help parents, though (by 2025 all working parents of children under the age of five will be entitled to 30 hours of free childcare per week) the future is, as they say, looking bright.
How are you impacted financially when it comes to helping out your children and their own kids? Has the cost-of-living crisis added extra strain to your situation – and do you welcome the upcoming changes with relation to childcare support? Perhaps you’re a stay-at-home parent who is happy to put career progression on hold. Whatever your views, let us know here at Unity Mutual or join the conversation over on Facebook.
Until next time…
*Survey by MRS Evidence Matters and LM Research and Marketing Consultancy, on behalf of Unity Mutual.
