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?

In response to comments about not having children, please remember that lives change unexpectedly. Our mortgage payments alone have gone up over 40% since having children. Over the same time our income has fallen due to public sector roles being downgraded.

Probably because your definition of ‘a nicer way to live’ isn’t that of everyone.

As far as human evolution goes, it’s demonstrable that it’s complex and massively variable, with there being no one set way that must be adhered to in regards to personal relationships, or to achieve happiness.

I've given each of my children very significant sums of money but I can afford to and I wouldn't have done it if it left me with nothing. I generally agree in balancing wealth out but only when there is wealth to be distributed and 5 fugures is definitely not it.

@CupEmpty interesting. So you have probably had a great education and have a well paying job?

We are not wealthy but are reasonably well off. Plan to pay for all our kids education so they will leave Uni debt free. We also plan to give them a deposit for their first house to help them on to the housing ladder

Where do you think our financial obligations should end? Is it proportional to the wealth of the parents or?

People don't know what their old age care needs will be, or how long they will live. I wonder if all those wanting a grab at granny or MIL's nest egg will be over there changing her nappies when she can't afford assistance.

Yes, it's fine. That's how life operates. Each generation works hard to make their own way, like the adults they are. Unless, of course, they prefer life on benefits.

But big economic shifts happen in every lifetime; they aren't bolts from the sky. Recession, changes to interest rates, job loss, disability, divorce , death, etc happen in the majority of lifetimes. Planning for adverse scenarios, not best case scenarios, is the prudent thing to do.

Live (and reproduce) below one's means.

I think it's fair to feel frustrated that they're not supporting. Frankly if they can't take turns visiting and expect you to shoulder the cost I wouldn't bother. However they're now at the point where the money they have has to last the rest of their lives -however long or expensive that may be - so I do understand why they wouldn't just give it away.

If I had the money to help my kids I would 100% do it. I've struggled in the past and couldn't personally sit and watch them in the same predicament if I was able to help, even if that was just with time to watch the kids and reduce their childcare bills.

But in this case a 5 figure sum may not even outlast them. They may need to supplement their pension especially if it's not a private one. Expenses such as home repairs, maybe a need for a private hip operation or similar (due to the long waiting list in the NHS) could drain their savings rapidly. If they need care that costs huge sums. My dad who developed dementia was in a home that cost 1200 a week. And that was a few years back. In the OP's case her parents have five figure sum that could be 10,000 to 99,000. Even at the upper end that's not enough to fund the extras the OP thinks they owe her.

I think it depends how much - as PP have said, 5 figures isn't overly significant if they're, say, just 65 and potentially have 30 years of retirement ahead of them.

That said I do very much believe grandparents/parents should help children if they need it. I couldn't enjoy myself and "my money" if I thought my children were in any way suffering.
My cousin ended up in really unsafe housing about 20 years ago - left an abusive partner and was housed by the LA in one of the most horrific parts of our city with high crime rates and violence etc. Meanwhile her mother lived 20 minutes away, alone, in a 4 bed detached house living off millions of pounds of inheritance. She didn't even consider letting her daughter move back in with her whilst she got herself back on her feet - it was up to me to scrape together what I had so she could at least get some money together to move elsewhere. The whole thing was a real eye opener.

They should play whatever role they choose to. You are not owed anything. Your future grandchildren will struggle to buy / rent a house more than you did, so would you consider spending less now on clothes, food etc and saving for them to make their lives easier when the time comes ? Of course not. Unless you choose to, but there should be no expectations.

I would have to disagree that for most people, being in a position to ensure your children leave uni debt free (you say "all" so even assuming its only 2 and they're doing standard 3 year degrees - £18k x 3 x 2, so £108k) and give them a house deposit would make you more than "reasonably well off".

I’m a bit confused. Which public sector incomes have fallen? I would think they would stay stagnant.

Why are you so broke?

Your mortgage going up since having children is not your parents fault. Back at the height of the recession after the 2008 crash i was paying 1600 a month. Himself wasnt working and i had been made redundant . That shite happens in life, you juts get up and get on with it we came out the pother side as did many others. Economic turmoil happens every generation. Here in Ireland in the 80's Irish working people were paying 65 per cent of their income in tax. Now these re the people who are retiring i dont begrudge them their money

Sorry to say but I think your parents are disgraceful. What's the point of all that money if it can't be used to better the lives of their own children and grandchildren.

Depends on your definition of wealthy and well off. I've given my kids lots more than that and I'd class myself as well off.

This all feels pretty sad to me.

On my dad's side, I have a disabled aunt receiving life long care, plus a substantial family property that would be split 5 ways if she was included.

My aunt was left out of the will on the grounds that there was 100% faith from my grandparents that her siblings would ensure she got her full entitlement of government care, and would gladly fund and support her living. And that's what they did. One sibling ran the family property. The others siphoned an equal share of the profits to enhance my aunt's care.

There's also significant wealth sharing from the older generations to the younger, with frequent financial gifts. Not megabucks - but a regular drip of a few hundred quid.

It's been the norm in our family to take care of each other and raise the generations up. My aunt wasn't entitled to any of her siblings money, they gave it out of love.

"Five figures"....are you sure OP?
At the point of having as little as just £10 or 20k in the bank, you think that should be shared across generations?
I've got a lot in savings - which I've gone without to create - and like hell would I share it with less fortunate family members.
Sorry not sorry!

I am a single parent living in London on an average salary, so far from affluent. My parents are much better off, and if I asked them for money I know they would give it to me.

I would literally go shoplifting before I would ask them for a penny. They would be so worried and stressed if they thought I was unable to manage my finances.

They did not get any financial help from their families to raise their children, nor did they inherit anything much. Everything they have has been earned by them through difficult financial times (these are not the first difficult financial times) and I don't feel entitled to it in any way. It would be different if their money was inherited - in that case I might feel they should share.

So I don't think that they should be regularly propping you up and they probably thinknits a slippery slope - my DM has learnt this lesson the hard way with DB helped him out a few times and now he thinks it's a automatic and guilt trips at every single opportunity if my DM says no

But I think you need to be honest with them and say sorry we can't afford to travel to see you why don't you come here and get an air bnb if they live a distance away.

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.

caused by people living longer & immigration to prop up the workforce. What do you suggest we do with them?

Sadly, this is so true:

“Life isn't fair is the first lesson you need to learn, fairness doesn't come into it when you're talking about other peoples finances or property.”

There is huge unfairness and I couldn’t disagree more with the way that an essential need (decent housing) has led to such wealth for some at the expense of the younger generation. But there is absolutely nothing that can be done about it if the ones who have the money won’t share it.

I do understand though, I felt so resentful when my late DM (who had never worked, money was earned by late DF) lived alone in a huge house with very healthy savings and investments while we were really struggling working long hours with large childcare costs and a big mortgage (in a house a fraction of the size) and had to watch every penny.

I didn’t say it was. I said my financial situation has changed significantly since having children (in ways unconnected to having a child) in response to comments that I shouldn’t have had my 2 children.

I don’t expect my parents to fund us as although they do have 5 figure savings, it's not really enough once you start to factor in potential care costs. It’s their money for their retirement and they will need it. My DC are mine and DHs responsibility. And we’ve worked hard to obtain he lifestyle we want for ourselves and them. We sacrificed lot when younger to get on a good financial standing so we can give them a decent life and also save for them for when they’re older. We will hopefully be in a much better position than our parents to help out when we are retired and will do so if we can.