How happy are you? It could all depend on your age group
It’s official, life’s better once you’re over 55…
…well, by some measures anyway.
A wide-ranging survey from Carnegie UK has shown a huge disparity between generations in terms of their health and wellbeing. According to its Life in the UK report, over 55s, on the whole, feel more content and secure than those in other age groups.[1]
For example, more in this category said they could afford to pay for a week’s holiday, socialise with their friends and family outside the home, or shell out for an unexpected, but necessary, expense.
And they also scored higher in other areas of wellbeing. For instance, the older age group tended to feel safer in their communities and were less likely to report poor mental health.
In some respects, these survey results aren’t really that surprising
After 20 or more years of work, you’re more likely to have accumulated a reasonable level of wealth. You’re probably paying regularly into a pension, maybe own your property (or are at least closer to paying off the mortgage). You might have a growing investment portfolio.
By 55, some may already be considering winding down or taking early retirement.
Source: Carnegie UK Like in the UK
The flip side – are you part of the sandwich generation?
So, in the words of former Prime Minister Harold Macmillan you’ve “never had it so good?”
Not quite. It’s always dangerous to make sweeping assumptions. While the results certainly challenge some stereotypes associated with people over a certain age, every person’s financial challenges (and opportunities) will be different. It’s sadly the case that too many people (of all ages) still face a choice between heating and eating.
And, while it may be true that by-and-large the over 55s have a lot more advantages, we’ve noticed more of our clients fall into what’s known as the ‘sandwich generation’.
This is adults in their 40s, 50s and even 60s who find themselves simultaneously financially supporting two generations. For example, they might care for an elderly relative, while also subsidising their children (or grandchildren) through university or helping them get onto the housing ladder.
With the combination of an ageing population and younger generations ever more financially dependent on their parents, the number of people ‘stuck in the middle’ is likely to keep going up.
Consider house prices – the average house in the UK costs around nine times average earnings (based on data to November 2022). The last time prices were this expensive was nearly 150 years ago. Mortgage rates are more of a millstone round the neck for younger generations than they were for those who were lucky enough to buy their first home 30 years ago. One client recently bought their grandson a flat outright, solving the problem of finding affordable university accommodation.
The pursuit of happiness
So, with these factors in mind, what can you do to help maintain that wellbeing?
For those clients caught in the middle it can often feel very frustrating. If you feel like you’re forever baling out your offspring, you might worry they only see you as a cash cow. It’s not a nice position to be in.
This is where financial planning is so useful. There are many ways you can use your money for yourself and for others, which will all be personal to you. But the frustration often comes from not being in control, i.e., a surprise handout given over begrudgingly to help make up a shortfall, not something that’s been already factored into your financial plans.
Instead, we think support should be proactive and deliberate. Building in support to your financial plan – for either younger or older dependents – means you can be more confident that you can a) afford it and b) the support you give can actually help reduce your tax burden, for example, reducing any inheritance tax liabilities.
Will this make you happier? A big aspect of wellbeing is feeling secure. A financial plan goes a long way to giving you greater piece of mind.
Speak to us to find out more about how to factor in financial support for dependents into your financial plans.
[1] Source: Peachey, J. and Wallace, J. (2023) Life in the UK: Focus on Age. Dunfermline: Carnegie UK. The survey scored three groups, 16-34, 35-54 and 55+, on collective, social, economic, environmental, and democratic wellbeing.