Generational finances

[Mummyongin]

I don’t expect I can word this right/fairly but essentially, if retired grandparents have some wealth (e.g., 5 figure savings or assets) and their adult children are bringing up young children on barely enough to pay rent/mortgage, energy bills, childcare and food - is this okay? What are your thoughts and beliefs about how to balance wealth and finances more fairly? What role should grandparents play financially?

No, I don't think there should be a cultural expectation that money should just roll down the generations.

When you have children then you take on the responsibility and risks of raising them. That's a decision you make.

£100k at age 65 could buy you £3,800 a year until you die. £300-ish a month. Add in the state pension and you are hardly wealthy. I wouldn’t try retiring until I had considerably more than 5 figures saved up.

5 figures is nothing and will be eaten up very quickly with a few unplanned for spends.

Just as youth is wasted on the young, wealth is wasted on the old.

The problem now is that decent wages are not enough to buy a decent house, so the young are reliant on family wealth to get started. In that situation, yes, I think parents who afford it have an obligation to help out. I couldn’t live in a comfortably 5 bed home while my grandkids lived in a small flat.

I know millennials and those younger have it tougher. However many of them won’t be moaning when they come into their Boomer parents’ assets in the years to come.

A small violin here for those at the tail end of Gen X without wealthy parents…

We still paid quite a hefty sum for property in the south, didn’t have the glorious work-life perks that those younger have and our very old or soon to be deceased folks didn’t quite accumulate the wealth of the baby boomers.

And yet the younger generation will financially leapfrog us once the inheritances trickle down.

Bide your time and in the mean time, cut your cloth accordingly.

And the poster above who suggested there is little benefit of inheriting age 55+ - umm bring it on I say! Some of us will still have kids at uni or school then!

I'm in a family where wealth was passed on either in inheritances, help while people were alive or houses. Until it reached my parents who have spent much of it and refused to help any of us in a meaningful way. Neither earned any of it and retired before 40. I on the other hand will be working until my late 60s and have earned everything I have. Rightly or wrongly, It's a hard pill to swallow. As a result we have done our damndest to ensure we can help our kids as much as possible, albeit with smaller resources. I want them to have an easier life than me so if I can help them in any way I will.

I believe in working together as a family to afford the cripplingly expensive young children years (childcare and mortgage to pay), if you can afford it.

DH and I knew there would be no financial support of any kind (the opposite in fact on both sides but for very different reasons) with the DC - our decision to stop at one child was partly financial. We could have afforded to have 2 or 3 children but long-term we wanted to have enough for generous house deposits/afford to help them during the expensive childcare/mortgage years too. I think it was important to us because it wasn't something we had and we obviously also saw it was getting harder and harder to get on the property ladder (we're late forties/early fifties - so it was pretty easy for us without any family help).

As PP have already said - five figure savings isn't a massive amount where you don't have a chance of earning more. It is retirement income that is more key and how many other children/GC you have.

Anyway, after helping my DC on to the property ladder I wouldn't really expect to give regular money directly but I would do things like help to pay for childcare/provide childcare, pay for GC music/swimming/clubs, pay for meals out. Another bonus to only having one is it is easy to keep it fair and easy to adjust up or down depending on their circumstances.

Interesting to see how many people think GP should be helping pay for the GC. If the GP were to express any ideas on feeding, car seats or anything else in relation to raising DC the MN answer is usually you have had your children, its our turn now.

This is true.

There’s no right answer to this as it’s down to the individual. Personally I plan on helping my kids as much as I can as I would have appreciated that so much when I was younger. For my parents though they were not at all interested in giving me or my sibling a leg up.

I am a boomer, comfortably off rather than wealthy. I feel it is unfair that I was able to buy a 4 bed detached house for £29,000 - which in those days was just one year’s salary - whereas my adult children’s generation are faced with tiny 2 bed flats costing upwards of ten years’ salary.
I therefore gave my DDs the whole of my
pension lump sum between them, to get them both on the housing ladder.
I don’t feel obligated to hand over any more of my savings - I think they should make their own way in the world, but I would certainly help out if they were in serious difficulty, eg made redundant.

The younger generation should not have had children if it were going to strain their budget to the extent they are eyeballing others' money.

Wait and save more before parenthood, or forego it. Don't do as one pleases and expect a bailout from relatives or the rest of society.

If elderly people have only between 10 and 99k they should keep it! How is that supposed to last them a whole retirement? A couple of cars, a couple of boilers and a couple of mid range operations and its gone. Plus if they do start giving it away to all and sundry it will be classed as deliberate deprivation of assets if they ever need care.

Exactly. The village is expected to hand over its cash but keep its opinions to itself.

I will do everything I can to help my children. My parents would help me (and when they are very infirm I will try to help them) . Whether or not this should be 'expected' it's a much nicer way to live, and I don't understand why loving families wouldn't do it. Humans didn't evolve to be little islands.

And that's leaving aside the fact that my parents house is worth at least ten times, in real terms, what it was when they bought it!

Wait and save more before parenthood, or forego it. Don't do as one pleases and expect a bailout from relatives or the rest of society.

That ignores intergenerational inequality though. Look at housing costs, childcare costs, wage stagnation. There's a wider issue about not investing in the countries younger people, no wonder people aren't having dc or are looking at going abroad

None, unless they want to.
It is indeed grabby to assume someone else's money should belong to you, regardless of relationship.

My ex in laws were very wealthy (self made through generous final salary pensions and property rises). They helped us a little when kids were small. However they were very aware of financial assets being split on divorce etc and so made it quite clear to me and the ex that they did not want their money being passed on to non family members. As it happens ex and I did divorce so they got their way as when they later died their money passed to their son.

I am early sixties so a "Boomer."
I inherited nothing from my parents.
Our family benefitted from the low house prices from 1960 to 1994 when our houses were purchased. Nobody rented. I believe this, and the fact that none of our family needed to go into care, has left us comfortable.
I have several hundred thousand in savings. I was widowed when my second husband died. My first marriage ended in divorce.

Half my savings came from my late DH's life insurance. When he died he had already paid off our mortgage after his mother left him half her estate. I was working for another 12 years after he died.

The rest of my savings is equity from downsizing my home two years ago.
I have given both my adult DC money to help them buy a house each in the last eight years.
I gave one of them money to replace their boiler two years ago. The other DC has received money for other things. If they need more in the future I will probably give more. They are both single and live alone.
My eldest DC recently inherited their father's estate so is unlikely to need more from me.

I retired at 61 due to ill health. If I need care in the future I would like to be able to stay at home and pay for care here until, or if, I need residential care. I will not get my state pension until 2026. Until then I am living on a small occupational pension and PIP.

I do not want my DC to have to look after me. They have their own lives.
Having some money behind me means I won't need to depend on them.

My heavens @Mummyongin you’ve worded your posts in the most annoying fashion.
5 figure savings is not much.
At their ages (say 70 yr old) they still have a lot of living to do.
if you think raising a family is hard now; it was equally so in the 80’s, and even the 50’s had challenges.
Your lack of socio-economics is showing. I presume your getting this view from YouTube and TicTok??
If you’re better educated than they are, the support to reach this was a gift to you, even if all they did was instill educations value.
why not post in money matters? Maybe your finances need tweaking?

I agree that parents / grandparents don't have to help but for goodness sake why would you let your nearest and dearest struggle on if you could help . It's seems really mean to me to have wealth over and above your needs yet not help your family .

I don't think adult children should have an automatic right to their parents wealth. However many parents want to help their adult children. We see how hard they work and yet can't afford any extras. I have helped all of my DC as much as I could afford at the time. I helped DD, my eldest child by paying her uni fees and accomodation and modest living costs. She got a job in holidays to boost income. Helped her through Masters degree too. Helped pay childcare cost for both dgc. She and her DH saved their own deposit for house. I've bought her an almost new car when her old one blew it's engine and she needed car for getting to work and getting children to school and nursery. I've helped child 2 eldest son with deposit for his modest 2 bed terrace house in North so it was quite cheap. I've paid for him to do class 1 driving lessons and test so he could go from driving a class 2 lorry to a class 1 lorry and earn more money. I've helped him in first 2 years he bought house with a few high energy bills he could not have expected when he set his budget. I am now helping child 3, youngest son by selling him one of my btl properties with a lot of equity in to give him a £50k deposit. He has saved up £10k of his own for deposit. I will pay solicitors fees for him too. He will be living close to me so more expensive area than his brother. I also do the gifting thing of £1k pet year gift to each of my 3 DC and £250 to each dgc. My dh does the gifting to dc and dgc too. Interesting to see how they spend it. My dd uses hers for family season tickets to zoo and family days out. My DS1 spends his on things for his house and a little holiday camping. My DS2 puts his straight off his mortgage. I was very lucky as my parents paid for my wedding, helped me at uni and my Mum looked after my 2 eldest DC whilst I worked. I'd love to help more with my dgc but they live too far away so I only see them about 4-5 times a year. That's why I helped out with nursery fees. I always buy dgc shoes and winter coats and I expect I shall pay towards school trips overseas as they get older. I save £25 per month for dgc too. I always pay if I eat out with any DC or nephews and nieces too. I'd rather help them now, when they need it than make them wait until I die. I hate thought of paying 40 percent over £350k to taxman.

IMO Grandparents should not be expected to play any financial role in supporting their adult children’s life choices/costs. We are very fortunate that some money is sent for our children each month but i would never feel that they should share their wealth with us

Overpopulation is at the root of most of those problems. There were billions fewer humans vying for housing and livelihood back when the "greedy boomers " were starting out. And a far less global manufacturing economy, meaning low-skill people were still in demand at decent wages.

Subsidizing the production of even more humans now is not the solution. And no one has a right to the lifestyle they want, at others expense. Back in the day those young boomers didn't have half the amenities and luxuries today's young adults think they are entitled to.

I’m writing this because it feels upsetting that we struggle to put a healthy meal on the table. I can’t give my children anything like the childhood I had (music lessons and annual holidays) despite my husband and I being more highly educated, me going back to work earlier and both working longer hours than either of our parents

Do you think they have an issue with you / your lifestyle? The job / career you've chosen if it doesn't pay well / having too high a mortgage / rent or expensive outgoings that they never had / having children without financial security (if indeed you did)? I think the older generation in many cases lived a fairly basic lifestyle / went without back in the day - no meals out / no top of the range cars / phones etc in order to save / generate wealth and if they see their children as spending on non-essentials, they think they're wasting money.

There should be no expectation for GPs to share wealth or help practically. It sounds like they've given you opportunities in terms of education / life skills and you need to stand on your own two feet without being dependant on anyone else. Of course, if they want to help that is up to them but it should never be expected or required.