Hodge has written a white paper to help intermediaries understand intergenerational finances to mark ‘Let’s Talk Money’ Week.
The study – ‘It’s All Relative’ – asked more than 3,000 people about their attitudes to money and their financial aspirations for the future. The research included in-depth face-to-face interviews (pre-Covid 19) and more than 3,000 shorter interviews.
Hodge wanted to better understand family finances among the generations. The research studies how different generations approach money-focused conversations and how having those difficult conversations could now be more important than ever.
This week marks Let’s Talk Money Week, the annual campaign to get Britain talking about money, and the Hodge data – which can be viewed here – seeks to understand how money, savings and spending is viewed across the generations.
The research uncovered a strong desire to make family top priority when it comes to financial help, particularly for those nearing retirement. But it also found that the focus on ‘family at all costs’ is impacting on financial wellbeing at a time when those nearing retirement should be enjoying a new-found freedom, and that many people don’t seek professional advice early enough.
The research went on to show that many people are still embarrassed to talk about money and more can be done by financial institutions to help people plan for the future.
Emma Graham, business development director at Hodge, said: “As an industry we’ve long acknowledged the Bank of Mum and Dad, or even Grandma and Grandad as one of the UK’s biggest lenders, but have we considered the impact on the personal finances and wellbeing of those lending, particularly when they are nearing retirement?
“Our research found those aged 55+ have the lowest expectations of their life improving in the future. Despite the many opportunities typically available to someone aged 55 or over, only 24% expected their life to improve, compared to 73% in the 18-34 bracket and 47% of those aged 35-54. One in five closest to retirement felt that life would generally get worse and expected their standard of living to drop. When you consider that retirement should be a time of optimism and freedom, this is a sad statistic.
“Professional advice could allow this super-generous group to achieve even more financially, both for themselves and for their families.
“Our challenge as financial providers and advisers is to convince them as early as possible of the benefits of saving and planning for later life and to make them aware of all of the products available. We can help to get them and their wider families talking about money without discomfort and to give them control of their money, while retaining the ability to gift to younger generations.”