Our latest article in our inherited wealth series, focusing on our new research into the change in mindset towards parents living with their children in old age.
- Less than 2 in 10 parents have made plans to pay for their own care in old age
- Only 30% of children expect to provide for their parents financially in retirement
- Children are concerned that residential care costs will eat into their inheritance
Our new research that shows changing attitudes towards parents living with their children in old age. Children are worried that their parents’ increased need for social care1, coupled with escalating care costs (now typically between £50,000-£92,000 a year for residential care)2, will impact any potential inheritance they might receive.
Accordingly, one in six are expecting their parents to move back in with them to save on care costs.
Changing structure of society
The research points to a significant change in society in future, with a return to three generations living under the same roof to save on care costs. 11% of parents plan to sign over a property to their children for them to live in together. One in six (17%) millennials expect their parents to move in with them, one in nine (11%) plan to move in with their parents to look after them and one in ten (10%) expect to purchase a joint property for them and their parents to live in.
The implications for society if Baby Boomers “Boomerang” back in with their children are significant; the percentage of older people living on their own in the UK is currently very high. In 2017, 23.6% of men and 31.6% of women aged 65-69 lived on their own; 29.4% of men and 55.8% of women age aged 70 and over lived on their own (Source: ONS).
The return to shared living has significant impacts for care costs, but also potentially the property market, increasing the available housing stock to buy.
This issue raises important points on inheritance, long term care and society
The research raises important issues of the impact of inheritance on society. 40% of parents think that long term care costs will impact the inheritance they leave to their children, and that it will reduce the inheritance they leave by 40%. Despite this, 51% have not thought about how they would fund care home costs and only 19% have made plans to fund their own care in later life.
John Porteous, Group Head of Distribution at Charles Stanley, and a Chartered Financial Planner said: “Paying for long term care for the elderly will be one of the critical financial issues for both families and society in future. Increasing care costs mean many people will have to sell their homes or eat into their wealth to pay for care.
“This has the potential to transform the way we live, with a generation of people moving back in with their children to save on care costs – the Boomerang Parents. It means children may not receive the inheritance they expect to fund their own retirement or to pay off their mortgage.
“By starting to plan early and getting expert advice, parents can ensure they can prepare for care or retirement home costs and ensure they maximise any inheritance pot they can pass on to loved ones.”
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