Are Things Really That Bad

This week the World celebrated the 50th anniversary of the first moon landing and it was fantastic to see such a positive story in the headlines, particularly as it seems that the media and people in general can sometimes take a dark pessimistic view of the world.

So, with this in mind, I decided to share some thoughts, courtesy of Jeremy Kisner, an American investment adviser and optimist.

Kisner reminds us that the world has improved dramatically over almost any time frame you can consider. But, he acknowledges, it doesn’t always feel this way because negative headlines attract eyeballs and sell advertising for the media. Granted, there are tons of very real problems. Nevertheless, Bill Gates nailed it when he said, “Headlines are what mislead you, because bad news is a headline and gradual improvement is not.”

Human progress occurs because every day a few billion people go to work and figure out ways to improve living standards. Individuals do not always recognise the gradual improvements. But one place you can see the progress is in the stock market which has been going up for most of our lives (with, granted, a few bumps in the road) and is now close to all-time highs.

People get scared reading the news — North Korea, Iran, Donald Trump, Vladimir Putin, refugees, economic disparities, global warming — and then they get even more scared thinking about the things that might go wrong. But meanwhile, people buy more things, companies grow, wealth is created, and billions of people live longer and better lives.

Here are a few of Kisner’s examples of human progress:

Life expectancy: Consider this: If you were born in 1900, you would have had a 23% chance of dying before age 20 and a 38% chance of dying before age 45. Kids born today have about a 1% chance of dying before age 20 and a 4% chance of dying before age 45.

Modern Conveniences: When our grandparents were born, virtually no one had electricity … or telephone or indoor plumbing. They didn’t have a car and couldn’t fly in an airplane. Today, 85% of the people in the world enjoy the benefits of electricity. And two-thirds have a mobile phone.

Poverty: Twenty years ago 29% of the world population lived in extreme poverty. Today it’s only 9% . . . and the rate is still falling.

Retirement: Some 90% of 65-year-old American men who were still alive in 1870 were working. Today only about 20% of 65-year-old American men are still working … and many of them are working by choice not necessity.

Housework: The average family spent 11.5 hours a week doing laundry in 1920. That has fallen to 1.5 hours a week as of 2014.

Safety: Americans became 95% less likely to be killed on the job over the last hundred years. Seat belts, air bags and other safety features have brought down auto fatalities from 50,000 a year in the 1970s to about 37,000 today, despite more cars on the road. The fatality rate from road accidents per 100,000 people has dropped from 25 to 11 — less than half what it was in the 1970s.

Disease: In the past century, vaccines and antibiotics have brought miracles for modern medicine. Just since 1990, the control of infectious disease has saved the lives of an estimated 100 million children.

Food. Between 1961 and 2009, the amount of land used to grow food increased by 12%, but the amount of food grown has increased by 300%.

Kisner maintains that people who think the best days for the Western World, and for our economies, are behind us are essentially saying that human innovation is going to slow down or stagnate. He says that doesn’t seem likely, at least over the next 20 to 30 years.

Don’t you agree?

 

How to Increase Your Generosity Without jeopardising Your Retirement

How are you going to get the best, most fulfilling life possible with the money you have once you retire?

Study after study has shown that retirees who spend their time and money on experiences are much happier than those who just buy stuff. Charitable giving can be a particularly meaningful way to keep yourself active and put your assets to good use.   Just as long as you don’t overdo it.

If you’re feeling an increased desire to give back now that you’ve retired, here are some tips on balancing your good intentions with what’s best for you and your family.

  1. Do your homework.

Recently, there have been high-profile cases of fraud and misappropriated funds at some very famous charitable organisations. But even if you’re giving to a charity that is well run, you should understand where your money is really going. If you’re happy with your money helping a larger organisation to pay its bills and employees, great. If you want your money to have a more immediate impact on those in need, consider giving to smaller organisations in your community.

Do some googling and check online watchdog databases to make sure your favoured charity is on the up-and-up and unless you know the organisers personally, avoid online crowd-funding campaigns that aren’t legally accountable for how they use donations.

  1. Consider a volunteer position.

Your favourite non-profit or charitable organisations need money. But they also need manpower.

If you’re thinking about working part time in retirement and a salary isn’t really important to you, diary regular volunteer hours instead. You’ll get all the same benefits of having a job: structure, responsibility, camaraderie. Plus, those who volunteer report lower levels of stress, an increased sense of purpose, and better physical and emotional health.

  1. Teach, tutor, or consult.

When looking for a charitable outlet, don’t overlook the professional skills that you honed over your career.

You might not have the qualifications to teach at a school or university, but you could talk to your local community centre about holding a seminar that could benefit your community. You might have finished running your business but there are high school children who could benefit from your mastery of business. Open your door to local small business owners or recent graduates who need an entrepreneurial mentor.

  1. Make a plan.

It’s a scientific fact that giving makes us feel good. But some retirees may get too caught up in their generosity. They forget that gifts and donations are coming from that same pool of assets that are supposed to keep them safe and secure for the rest of their lives. They may have trouble setting limits and saying no.

There is indeed such a thing as too much giving. You might not think much about writing an extra  cheque or two early in retirement. But it is important for retirees to maintain a long-term perspective on their nest eggs. This generation of retirees is going to live longer and lead more active lives than any in history. You need to make sure that helping someone today isn’t going to make it harder to cover your health care and cost of living needs tomorrow.

So, if you and your spouse want to make regular charitable donations, you should come in and talk to us. We can incorporate giving into your monthly budget and retirement income plan.

We’re always happy when our clients want to help others. But it’s our responsibility to make sure your financial plan covers your best interests first.  Let’s work together on a plan that will make your retirement secure and the world around you a little brighter.

 

 

Tax-efficient ways to fund the next generation

It’s natural that you may want to give younger members of your family a financial start in life, especially when we hear about some students graduating with eye-watering levels of debt. If you can help your children or grandchildren without risking running out of money yourself; it’s important that you do so effectively.

An obvious way is by funding university tuition fees and maintenance costs. By funding a student’s three-year course upfront, parents or grandparents can prevent the student from taking on a 30-year debt and the interest costs associated with that.

There are a number of ways do this.  Set out below are two tax-efficient ways to do this are:

Individual Savings Account (ISA)

Start saving whilst the child or grandchild is still very young.  If the investment is allowed to grow, it could build up into a sizeable sum. The money can then be given to the grandchild as an adult.  The capital could be enough to cover tuition fees and possibly board and lodging as well. If the ISA is a Junior ISA, set up in the child’s name, any gains will not incur Capital Gains Tax, and they will not be considered part of the parents’ or grandparents’ estate for Inheritance Tax purposes.

However, the child will automatically gain access to the money when they turn 18, hence they can choose what to do with it. If the ISA is set up in the parents’ or grandparents’ names, the parents or the grandparents would be able to decide how the money from the ISA is used, but it would be considered part of their estate for Inheritance Tax purposes for seven years after it has been gifted to the adult child or grandchild.  See our previous article on gifts and the 7-year rule.

Investment Account

For tax reasons, this approach may be best suited to grandparents. Grandparents can set up a designated account for a grandchild and invest a capital sum in it. The grandchild’s initials are put in the designation box when the account is set up, creating a bare trust. A bare trust, also sometimes known as a ‘simple trust,’ is one where the beneficiary (the person who benefits from the trust) has an immediate and absolute right to both the trust capital and the income received by the trust from that capital.

HM Revenue & Customs will view income and gains from the investment as being attributed to the minor, who will have their own Income Tax and Capital Gains Tax allowance, so there will be no tax implications for the grandparents. Any money invested in this way leaves the grandparents’ estate seven years after it has been gifted. At 18 (16 in Scotland), the grandchild is legally entitled to the money, however, and can use it however they see fit – which may not necessarily be for education.

Funding for purposes other than education

Many parents and grandparents want to set up their children or grandchildren to enjoy a secure financial future yet paying down student debt is not necessarily the best option if they have a spare capital sum to invest.

They could also consider helping their children or grandchildren to save towards a house deposit (using a lifetime ISA) or start a pension for them so that they have security in later life.

Looking for help to grow your money?

To help you make better-informed investment decisions about how you can assist the next generation(s), please chat to us about what you would like to do.  We can look at this with you to help you decide if you can afford to do so and how.

Warnings

This article is distributed for educational purposes only and must not be considered to be advice.  The information is based upon our current understanding of taxation legislation and regulations.  Any levels and bases of, and reliefs from, taxation are subject to change.  Errors and omissions excepted. 

The “ABCDE” Method to Avoiding Knee-Jerk Reactions to Negative Financial Events

As part of the Financial Planning process, we talk to clients about how market volatility is a normal part of investing. We’ve also discussed how we’ve structured investments to “weather the storm” and maintain a comfortable level of income for both themselves and their family during turbulent times.

But we also understand that even those who are armed with this knowledge can get nervous during a market dip. What’s important is that you know how to prevent that initial wave of negativity from leading you to rash decisions that could damage your nest egg much worse than a market correction.

Dr. Martin Seay is a specialist in positive psychology, which focuses on strategies that people can use to improve their sense of well-being. Dr. Seay’s ‘ABCDE’ method can help you work through your reactions to distressing financial news and arrive at a positive outcome.

Let’s run through an example of how to use this method to avoid making a bad, emotion-based financial decision.

A. Activating Event

Sometimes stress and anxiety can feel all-encompassing. Dr. Seay believes it’s important that we pinpoint the event that triggered our negative feelings.  So, while you might feel general anxiety about your finances, drill down a little deeper. Is your job secure? OK. Are you saving and investing according to your financial plan? Good.

Did you just read on social media that today’s market correction was “THE BIGGEST ONE-DAY DROP IN HISTORY!”

Ahh, there it is. Let’s move on to the next step.

B. Belief

Market volatility can rouse some of our worst instincts about investing. We might fall back on long-buried beliefs like, “This game is fixed!” We might feel like we’ve entrusted our financial future to powers beyond our control.

Working through this step, it’s important to ask yourself where your beliefs come from. Have you been unsettled by widespread media coverage of major financial problems, like the 2008-2009 financial crisis? Have you had negative interactions with the finance industry in the past? Perhaps one of your parents distrusted the markets or made a poor investment that had a negative impact on your family.

Figuring out why you believe what you believe about the markets can help alert you before you fall back into bad financial habits.

C. Consequences

Panicked investors who can’t shake negative beliefs about the markets often make poor decisions during downturns. They think they need to “get out fast” to avoid more negative consequences, like further losses.

Ironically, cashing out your investments during a market correction usually leads to far more serious consequences in the long run.

So how can you stay focused on the big picture?

D. Disputation

Start by using what you know to counter what you believe.

For example, we’ve discussed in both client meetings and our blog that the historical, long-term trajectory of the financial markets has been to rise over time. And now, market averages such as the FT 100 index are near all-time highs. Therefore, when the market does have a temporary drop, we might say, “The FT was down x hundreds of points today.” It sounds like a big number, but as a percentage, it may just be normal volatility.

We’ve also discussed that “market timing” strategies usually just don’t work. That’s why our portfolios are diversified, balanced, and strategically re-balanced as necessary. Decades of market history have shown that sticking to this type of investment strategy may be more effective – and stable – than trying to jump in and out of the market based on what’s happening in the news right now.

E. Energised

 It’s amazing how just reminding ourselves of what we know to be true can make us feel better about a negative situation. Hopefully at the end of this process, you feel a renewed sense of positivity about this present moment and your financial future.

But, we understand that market volatility can be complicated; and a downturn can be downright nerve-wracking.

 

Warnings

This article is distributed for educational purposes only and must not be considered to be advice.   Errors and omissions excepted. 

Freetirees

Pension freedoms usher in a new generation

The introduction of pension freedoms has been a huge enabler for over-55’s, allowing millions to draw income from their pensions flexibly. Pension freedoms offer the opportunity to transition into retirement by continuing to work with reduced hours beyond traditional retirement age.

This emerging trend enables you to choose a middle path, allowing for reduced working hours and more flexible quality leisure time, while also receiving your retirement benefits. Taking a phased approach to retirement, new research[1] shows, was the preference for half of UK workers over 50, or five million workers[2].

Tailor retirement to your own individual requirements

The flexibility that pension freedoms gives means that older workers can tailor their retirement to their own individual requirements, giving rise to a new distinct and more ‘free’ stage of life in between work and retirement.

A quarter (26%) of over-50s could see themselves continuing to work while collecting their pension, but their motivation for doing so isn’t driven solely by economics. Keeping their brain active and an enjoyment of work as well as the benefits of social interaction all play their part.

Work–life balance has never been more important

Earning an income later in life also provides workers with the opportunity to continue saving, which can mean higher retirement benefits in the future. The research highlights that a work–life balance has never been more important to those over 55. Pension freedoms have allowed them to throw off the shackles of a traditional retirement and follow a plan that suits their individual needs. While historically people benefitted from generous final salary pensions, one drawback of these was that they didn’t offer much flexibility to decide how and when to take benefits.

The pension freedoms have changed the way people think about retirement and are enabling the rise of a more flexible transition into retirement, including allowing people to choose to start accessing some retirement savings to support a reduced working pattern.

Freedoms to continue to live life on your own terms

Pension freedoms have allowed older workers to be more flexible, creating a distinct phase in their later life where they can alter their working pattern to their needs. This allows them to continue working beyond traditional retirement age while also having more time for leisure, for family, for volunteering and to pursue hobbies and travel.

The research also highlights another point that older workers want to be able to continue to live life on their own terms, and pension freedoms allow an increasing number to enjoy a new life stage where they can combine reduced working hours with enjoying more leisure time.

What is your financial action plan?

For many people, it’s not clear where their money will come from when they no longer receive a salary – and that can be stressful. But don’t worry. With our help, you can create a plan of the actions you can take today to prepare you for the life you want tomorrow.  Why not speak to us to arrange a meeting.

 

Source data:

[1] Research conducted by Aegon in conjunction with Opinium, based on responses from 1007 UK workers aged 50+ earning £20k+ between 30 November and 6 December 2018.

[2] Office for National Statistics A05 NSA: Employment, unemployment and economic inactivity by age group

Have You Been Surprised by Retirement?

We can’t know for sure what’s ahead in retirement any more than we know about our career when we take our first job.  We might start out with a plan, but life happens, and before we know it, we can find ourselves in the midst of something entirely different.

The surprises might come right away, when the reality of retirement doesn’t match up with our dreams. They may come later, after we think we’ve got it all figured out . . . only to find we don’t. By definition, we can’t know what surprises are in store for us.

Here are a few surprises …. have you experienced others?

A child moves back home. No one’s surprised if a son or daughter returns home after graduating from university. The surprise comes when for example, a single, 32-year-old son loses his highly paid job in the city, can no longer pay his rent, and moves back in with his parents. Hopefully they find another job and then off they go on their own again, but this could take some time so be prepared and don’t make it too comfortable for them… unless of course you really do want them to stay.

Where are we living now? A close friend of mine told me he always figured he’d retire to Spain. He and his wife spent several years visiting various parts, until one weekend they stayed with some friends in North Wales. They fell in love with area and before the weekend was over, they’d put down a deposit on a new house. Now, two years later, they love it . . . but even they are still surprised they ended up in Wales instead of Spain.

The doctor calls. It is probable that we will all get a nasty medical surprise at some point. You may have had an active lifestyle in your younger days and have visions of this continuing into retirement. But the arthritis in your knees and ankles may make you rethink this. Many people are taken aback when they discover they have to limit their activities or take medication for the rest of their lives.

Are we going to work? A lot of people plan to take a part-time job after they retire, then are surprised to find out the workforce is not clambering for 65-year olds. Working at the local DIY store isn’t everyone’s idea of a dream job, and whilst some of us may be suited to a consultancy role in our chosen profession, that is not for everyone.   The other ideal is to work whether it is paid or otherwise in a sector that interests you. Volunteer at your local theatre group or independent cinema or a charity.

One of my neighbour’s volunteers to look after hearing dogs (dogs for deaf people) for one or 2 weeks at a time whilst their trainer takes a break.   This means that he gets to exercise and look after the very well-trained dogs but without any long-term commitment.

Money doesn’t matter as much. Although I find that retirement is a great leveller. Most of us expect to live on a reduced income, some savings and maybe a pension. Our income is stable. We’re not pushing for a pay rise or promotion. The pressure is off. So, a lot of people are surprised that success in retirement is less about how big our house is, or what car we drive, and more about having fun, hanging out with a good crowd, and leaving a legacy for friends and family.

We can deal with all the change. I know it’s sounds stupid, but it’s a surprise to me that after retirement, life goes on — meaning things continue to change.  We move; we have grandchildren; our kids do something unexpectedly different. We have different friends, perhaps different interests. We realise we can cope with a lot of change and adapt to new developments. Yes, some of us are surprised that we can do this!

 

Improve Your Relationship with Money by Answering These 5 Questions

Many people have a complicated relationship with money. Hang-ups carried over from childhood experiences get mixed together with positive and negative experiences through adulthood. Few people ever take the time to reflect on what money really means to them and how they can “get right” with money to make smarter decisions.

Take time to answer these 5 questions and you might find that you can do a better job of living your best life possible with the money you have.

1. What’s your first money memory?

Your earliest experiences with money probably happened in your home. You saw how your parents earned and managed their money. You probably compared the quality of your family home and vehicles to what you saw at friends’ and neighbours’ houses. An unexpected job loss or illness might have led to some very lean holidays or none at all. Or, if you grew up in an affluent household, you might have taken money for granted in a way you no longer do now that you’re the one earning it.

Identifying some of these early memories is critical to reassessing your relationship with money. Are you following positive examples towards decisions that are going to improve your life? Or, without even realising it, are you repeating poor money habits that are going to hurt you in the long run?

2. Do you feel like money is your servant or your master?

Sometimes money makes us feel like we’re a hamster on a wheel, running as fast as we can without ever really getting anywhere. But if you never stop chasing after that next pound, when it comes time to retire, all you’re going to have is money, and a whole lot of empty days on your calendar.

People who get the most out of their money recognise that it’s a tool they can use to skillfully navigate to where they want to be in life. So, instead of working too long and hard for more money, think about how to put the money you have to work for you.

3. What would you do if you had more money?

You’ve probably read about studies that show lottery winners don’t end up any happier than they were before their windfalls. This is a dramatic example proving some conventional wisdom: money doesn’t buy happiness. That’s especially true if you’re stuck on your wheel for 40 hours every week just chasing more and more money.

If the idea of having more money gets you thinking about all the things you’d buy, it’s important to remember how quickly even the fanciest new car smell will fade.

If you would immediately quit your job if you had enough money to support your family and live comfortably, then maybe you need to think about a more fulfilling career.

Having more money might not “solve” some issues you’re currently experiencing but asking what you would do if you had more money might lead you to new decisions that improve your current life satisfaction.

4. What would you do if you had more time?

Imagine you don’t have to work. You can spend every single day doing exactly what you want. What does your ideal week look like? What things are you doing? What hobbies are you perfecting? Where are you travelling? With whom are you spending your time?

These things often get pushed to the side when we’re busy working. But if your money isn’t providing you with opportunities to spend time doing what you love with the people you love, then your work-life balance might need an adjustment.

5. What would your life look like to you if it turned out “well”?

Hopefully by now you’re starting to think about how your relationship to money could be keeping you from getting the most out of your money.

The successful retirees that we work with don’t look back fondly on the amount of money they made or how much stuff they were able to buy. They tell us their lives turned out well because they used money to make progress towards major life goals. They say their money provided them the freedom to pursue their passions. And their sense of well-being increased as they committed time and resources to health, spirituality, and continual self-improvement.

When you reach retirement age, we want you to look back happily on a life well-lived. Come and talk to us about how our interactive tools and Life-Centred Planning process can improve your relationship to your money.

Millennials ‘misjudging inheritance windfall’

I read an article recently which seemed to indicate that more financial planning education is needed for Millennials.

For those that don’t know, Millennials are those born between 1981 and 1996, so those currently aged 23 to 38, and who grew up during the time when the internet became a normal everyday way of life.

A new survey conducted by Wealth Manager, Charles Stanley highlighted that some young people have an expectation of the amount of money they will inherit and what it could buy. Their survey found that the majority of millennials surveyed misjudged the amount of inheritance they will receive and when they expect to get it.

The survey suggests that whilst young people expected to receive nearly £130,000 from relatives when they die, the median amount handed down was only £11,000!

Similarly, one in seven millennials expected to inherit before they turned 35, while in reality the typical inheritance age is between 55 and 64. There is also an expectation about what an inheritance can go towards. At least 22% of those surveyed planned to use any money to go towards a deposit on a house, although official statistics suggest currently only 7% actually used the funds they had in that way.

“People are living longer than ever, so relying on an inheritance to get on the housing ladder is a risky strategy as you may get less, and much later than planned,” said John Porteous, from Charles Stanley. “In reality, most people save and invest to get on the housing ladder. Starting early and planning ahead is essential to achieving the deposit you need,”

Having said that, according to Your Money, more people are inheriting. Inheritance tax receipts in the UK hit a record high of £5.4bn in the 2018-19 tax year, up £164m or 3.1% on the previous 12 months, which was also a record.

The Financial Times says,

Three Reasons Why You Should Work Even When You Don’t Need the Money

It might sound a little crazy but there are many benefits to working even though you no longer need the money for your living or retirement needs.

These “retirement workers” have discovered that part-time jobs or volunteer positions allow them to keep a nice pace in life and find a balance among using their talents, enjoying recreation, traveling, and spending time with family. Some of our most ambitious clients even start brand new companies in retirement.

Here are three important benefits of working in retirement that might persuade you to clock back in a couple of days a week.

Working is good for you.

Retiring early is a very popular goal. But while it makes sense to want to enjoy your assets when you’re younger, some studies have linked retirement to decreased mental and physical activity and higher instances of illness.

Working keeps your mind and body active. It makes you engage in problem solving and creative thinking. It keeps you mindful of your health and appearance so that you make a good impression on colleagues and customers. It challenges you to keep achieving and rewards you when you do.

And, if nothing else, it keeps you from vegging out on the sofa all day and driving your spouse crazy!

Work can give you a sense of purpose.

Many retirees struggle with the transition to retirement because their sense of purpose and identity is so tied to their work. Without that familiar job and its schedule and responsibilities, some retirees struggle to find a reason to get out of bed in the morning. A part-time job can restore some of that sense of structure and drive.

In fact, you might find that working in retirement gives you an even greater sense of purpose than your former career did. You might have worked a job you didn’t 100% love in order to support your family. Now that you no longer need to worry about that, you can take that position at your local library or work a couple of days every week at that charity that’s making a difference in your community or a charitable organisation that’s close to your heart. You can feel like you’re making a contribution to society without worrying about the size of your salary.

Work can improve your connections to other people.

Early retirement can be a period of isolation for some. Your friends and family might still be busy working and raising children. The familiar social interactions you enjoyed at work are gone. You and your spouse probably share some common interests, but you can’t spend every single second together.

It’s important for retirees to be open to making new personal connections in retirement. A new workplace is a great place to start that process as you will meet new people from different walks of life.

You will work with and help people who can benefit from your personal wisdom and your professional skill set. You might meet other people who, like you, are trying to stay active and put their talents to good use. The more involved you are in your community, the more curious and adventurous you’re going to be about trying new restaurants, shopping in new shops, and interacting with more people.

Of course, working in retirement can affect other aspects of your financial planning even if you don’t need the money, such as taxes, withdrawal rates from your investments, and your relationship with your spouse. If you’re considering a new part-time job, why not set up a meeting to discuss any adjustments we should be thinking about so that you get the best life possible with the extra bit of money you’ll soon have.

 

A New social phenomenon – the ‘sandwich generation’

In recent years, a growing realisation has formed that we’re in the middle of a new social phenomenon – the ‘sandwich generation’. The term ‘sandwich generation’ is often used to refer to those who care for both sick, disabled or older relatives and dependent children.

With an ageing population and many people starting families later in life, ‘sandwich caring’ responsibilities are on the rise. However, new research from the Office for National Statistics (ONS) has highlighted the fact that a pensions injustice could be making life even more difficult for this group.

Twin responsibility

The report shows that almost 27% of sandwich carers show symptoms of mental ill health[1] while caring for both sick, disabled or older relatives and children. With life expectancy increasing[2] and women having their first child at an older age, around 3% of the UK general population[3] – equivalent to more than 1.3 million people – now have this twin responsibility.

Sandwich carers are more likely to experience symptoms of mental ill health – which can include anxiety and depression – than the general population (22%), according to the ONS analysis for 2016 to 2017[4].

The prevalence of mental ill health increases with the amount of care given. More than 33% of sandwich carers providing at least 20 hours of adult care per week report symptoms of mental ill health, compared with 23% of those providing fewer than five hours each week.

Health satisfaction

People providing fewer than five hours of adult care each week report slightly higher levels of life and health satisfaction, relative to the general population. Some of the differences between the two groups could be explained by demographic differences. For example, more than 72% of the sandwich generation are aged between 35 and 54 years, while 62% are women. Whereas among the general population, 38% are aged 35 to 54 years, and 51% are women.

Around 76% of those providing fewer than five hours of adult care say they’re satisfied with life, while just 10% are dissatisfied. Meanwhile, 74% of the general population are satisfied with life, with 16% saying they’re dissatisfied. However, when sandwich carers spend more than five hours a week providing adult care, they report lower levels of life and health satisfaction than the general population.

Sandwich carers

Those providing between 10 and 19 hours of adult care per week are least satisfied according to both measures, even compared with those giving at least 20 hours each week. This could be because 69% of carers in the 10 to 19-hour category are in work (either employed or self-employed), compared with 41% of those providing at least 20 hours a week.

Similarly, many sandwich carers are not satisfied with the amount of leisure time they have. Those looking after their relatives in their own home – half of whom provide at least 20 hours of adult care per week – are least satisfied.

General population

Overall, around 61% of the general population are happy with their amount of leisure time, compared with 47% of sandwich carers looking after their relative outside the home and 38% of those providing care within their own home.

As well as reporting a lack of leisure time, 41% of sandwich carers looking after a relative within their home say they’re unable to work at all or as much as they’d like. The ONS report also shows that women sandwich carers – who account for 68% of those providing at least 20 hours of adult care per week – are more likely to feel restricted than men. Around 46% of women feel unable to work at all or as much as they’d like, compared with 35% of men.

Labour market

Women sandwich carers are also much more likely to be economically inactive than men – 28% are not part of the labour market, compared with just 10% of men in the same situation. It should be said, though, that the majority of sandwich carers are able to balance their job with caring responsibilities. More than 59% of those providing care at home say this does not prevent paid employment.

Clearly, caring for two generations could have an impact on carers’ finances. One in three sandwich carers say they are ‘just about getting by’ financially, while one in ten are ‘finding it difficult’ or ‘very difficult’ to cope. Meanwhile, only 17% say they are ‘living comfortably’, compared with 32% of the general population.

Preparing for a more secure financial future

As concern grows among sandwich carers, so too does the need to financially plan for ageing dynamics and family relationships. If you’d like to talk about how we can help you understand the big questions of where am I right now and how you might get to your own financial freedom then call or pop in for a coffee.

Source data

[1] This is based on the General Health Questionnaire (GHQ), where a score of four or more indicates symptoms of mild to moderate mental illness such as anxiety or depression. The GHQ is self-reported.

[2] Life expectancy at birth in the UK did not improve in 2015 to 2017, having risen consistently for decades beforehand. The ONS investigated the stalling of improvements in life expectancy and its links to mortality rates.

[3] For the purposes of this article, the general population is all adults (including sandwich carers) aged 16 to 70 years.

[4] The ONS analysis defines sandwich carers as people aged 16 to 70 years who have a dependent child (one aged under 16 years, or 16 to 18 years, who is in school or non-advanced further education, not married and living with parent) in their home, and also provide regular service to a relative (usually parents, parents-in-law, grandparents, aunts or uncles, or another relative) who is ‘sick, disabled or elderly whom you look after or give special help to’. The analysis is taken from Understanding Society, the UK Household Longitudinal Study. Households are surveyed each year either through a face-to-face interview or a self-completed online survey. Data collection takes place over a 24-month period, and the sample size for the general population in the 2016 to 2017 period was 34,000 individuals.