Several demographic and lifestyle changes mean many people today face financial pressures that previous generations may not have encountered in quite the same way.
For instance, people are now living longer than ever before. According to the Office for National Statistics (ONS), life expectancy at birth in the UK was 83 years for women and 79.1 years for men from 2022 to 2024.
While this is undoubtedly positive news, longer lifespans can also mean that more families need to plan for extended periods of later-life care and support.
At the same time, many people are having children much later in life, with the BBC reporting that women born in 1978, on average, have one child by the time they reach 31. This would have occurred at the age of 26 for their mothers’ generation.
Meanwhile, for girls born in 2025, this is projected to occur by age 36.
Together, these trends could mean you find yourself supporting two generations at once, a position often referred to as the “sandwich generation”.
Further information from the ONS shows that there were an estimated 1.4 million people in the sandwich generation in the UK between 2021 and 2023.
If you do find yourself in this position, balancing these responsibilities could place pressure on both your time and finances.
Continue reading to learn more about the challenges facing the sandwich generation and some practical steps that could help you manage them.
The “sandwich generation” refers to those supporting both children and ageing parents
The phrase “sandwich generation” was first coined in 1981 by American sociologist Dorothy Miller. It describes people typically in their 30s or 50s who provide financial or practical support to both their children and elderly parents.
This can create a variety of pressures, as you may find yourself juggling:
- Mortgage payments and household expenses
- School or university costs for your children
- Financial support for elderly relatives
- Saving for your own retirement.
With so many competing priorities, it can sometimes feel difficult to focus on your own financial goals.
However, taking a proactive approach to your planning efforts could help you manage these responsibilities more effectively.
Prioritising your financial security could help protect your long-term future
When you’re supporting multiple family members, it can be easy to place their needs ahead of your own financial wellbeing.
Yet, maintaining your own financial security is essential. If your finances become strained, it could become much harder to support your loved ones in the long term.
It might be prudent to focus on saving for retirement in particular. Some in the sandwich generation may reduce or pause their pension contributions while helping children or parents financially.
While this decision may well ease short-term pressures, it could create challenges later in life.
Pension contributions typically benefit from tax relief and long-term investment growth, meaning delaying them could make it more difficult to achieve your desired lifestyle in retirement.
As such, continuing to prioritise your long-term financial security may help ensure that you remain in a strong position to support others when needed.
Protecting your income could safeguard your family’s finances
If you are supporting both older and younger generations, your ability to earn an income may be one of your most valuable assets.
Your salary likely funds your household expenses, supports your children, and may also provide financial assistance to elderly relatives.
If this income were interrupted, these responsibilities could become far more difficult to manage.
As a result, it may be worth considering what might happen if injury or illness prevented you from working for an extended period of time.
Income protection, which offers regular payments if you’re unable to work due to an accident, illness, or a period of redundancy, could help you deal with bills and offer some peace of mind.
Meanwhile, the tax-free lump sum payment from critical illness cover if you’re diagnosed with a condition covered by your provider could give you space to focus on your recovery without the added stress of managing household finances.
You may also want to consider building an emergency fund. A good rule of thumb is holding between three and six months’ worth of essential expenses, though you may want to save as much as 12 months’ worth if you have many dependents.
Having a financial safety net in place could help you manage unexpected costs and reduce financial stress during uncertain periods.
Discussing your parents’ financial situation could help you plan for the future
One of the more challenging aspects of being part of the sandwich generation may involve discussing finances with your parents.
These conversations can often feel uncomfortable, especially if your parents are used to managing their own finances independently.
However, a clear understanding of their situation could help you prepare for any potential responsibilities in the future.
For example, you may want to discuss:
- Their current sources of income
- Any savings, investments, or other assets they hold
- Whether they’re claiming all the benefits they’re entitled to
- Their plans for later-life care.
Having these discussions sooner rather than later could help you determine whether they’re likely to require support, and how you might plan accordingly.
You may also want to ensure essential legal arrangements are in order, such as their will or Lasting Power of Attorney (LPA).
Read more: Why having an up-to-date will can help you secure some peace of mind
Together, these could help ensure their wishes are respected if they’re no longer able to make financial decisions themselves.
Planning how you support your children could help you manage future costs
While caring for elderly relatives can sometimes feel unpredictable, the financial commitments of your children may be easier to anticipate.
Indeed, you may already have a good idea of potential expenses, such as:
- School or university fees
- Contributing towards a first car
- Helping them onto the property ladder.
Understanding these costs could help you plan effectively. For instance, setting money aside early or using tax-efficient savings and investment accounts may help you prepare for these milestone purchases.
At the same time, it might be worth thinking about your own later-life needs.
If you’ve experienced the challenges of supporting ageing parents, you may decide to take steps that reduce the likelihood of your children facing similar pressures in the future.
This could include building savings for potential care costs or ensuring your estate plans are up to date.
Get in touch
We can work with you to create a plan that supports both your immediate familial responsibilities and your long-term objectives.
Please use our search function to find your nearest Verso office, or for Verso Investment Management enquiries, please contact us at info@versoim.com or call 020 7380 3300.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The Financial Conduct Authority does not regulate estate planning, Lasting Powers of Attorney, or will writing.
Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.