Sandwich Generation: 5 ways to guarantee your ship doesn’t sink whilst keeping your family's afloat

Sandwich Generation: 5 ways to guarantee your ship doesn’t sink whilst keeping your family's afloat

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3 minute read

Are you feeling the pressure of being pulled from both sides by two generations? You’re desperately trying to support your children and your own family unit and meanwhile, you are now responsible for your elderly parents in a financial capacity. Let us assure you, you are not alone. In the UK alone, 1.3 million people fall into what we call the ‘sandwich generation’.

Due to elderly populations living longer lives and many middle-agers starting their families later in life today, an increasing number of adults are finding themselves in this predicament. Today more than ever before, the pressure for parents does not end when their children reach adulthood either; in fact, many young adults are supported by their parents for many years to come. According to the Office for National Statistics, a quarter of adults aged 20 to 34 live with their parents, with only 40% of those young adults contributing financially to the household.

On the other side of the coin are the elderly parents that are living longer. Regrettably for many, this has come at the cost of living longer in what we consider ill-health. Two in five adults in the UK are supporting their elderly parents.

The ONS report highlights that over a million people are stretched to breaking point from a financial perspective.  Many of this sandwich generation do not fully comprehend the impact that it will have on their finances and their future.

Here are five tips to support your family without endangering your financial security.

1. Prioritise You

Your primary concern is to ensure that you are financially secure. It’s natural to want to help your family but equally, it is also important to break the cycle and guarantee you won’t be a financial burden to your children in the future.

Have a strong and robust financial plan in place. You should know where you are going, how much you need and how much you can afford to give away. Avoid over-stretching yourself. Be honest with yourself and with your family.

It’s prudent to try and retain at least six months’ worth of expenses as a contingency fund. This will give you something to fall back on if something unexpected occurs. Always be mindful to top this up if you dip into it.

2. Build Support Into Your Plan

Embedding support for your family, into your financial plan will ensure you don’t threaten your own security. It also allows you to do this in the most tax-efficient and smart way.

Have an honest conversation with your parents about their health and finances. Do the same with your children about their plans and financial situation. This will not only give you an indication of how much support they may need but it also manages anyone’s expectations for the future.

This allows you to carefully plan for these expenses.

3. Consider Gifting An Early Inheritance

Typically, adults in their late 20s to 30s tend to require the most financial support because they are at a point where they are starting out in their career and saving to buy the most expensive purchase so far in their lives. A financial gift from their parents could make a life-changing difference.

Giving your adult children their inheritance early could be beneficial. If you gift money and live seven years, the gift should not be included in your estate and may avoid inheritance tax.

The optimum time to gift an inheritance early is after downsizing. When you have released capital that was previously tied up in your house.

To evaluate whether you can afford to gift an inheritance early, you will need a robust financial plan. The plan should demonstrate that you will be secure until age 100 without this money. Look at our blog: Why you should gift your adult children their inheritance early.

4. Funding Care Fees For Your Parents

If your parents are struggling, you can contact your local authority or GP to request a needs assessment to see how much support they require and to ascertain what they may be entitled to. Once their needs are assessed, you can then plan for the expense or financial support they require. This blog might help you to decide.

Care is costly and so planning well in advance will help. Asking siblings to split the expense may lessen the blow on your finances. Looking into equity release, downsizing or selling your parents’ home, could be considered. In addition, ensure that they are receiving the government support they are entitled to.

According to the Money Advice Service, on average, 14 hours per week, at-home care could cost approximately £14,000 a year. A live-in service is approximately £41,000-£65,000 a year, depending upon location. If the care need is complex this figure could rise to a staggering £85,000. Residential nursing home costs range from £27,000 to £39,000 per year, or £35,000 to £55,000 if nursing is required.

A Lasting Power of Attorney (LPA) enables you to choose someone to manage your financial and medical affairs. So, while your parents have mental capacity, it’s imperative one is drafted.  If you need more information, look at our blog on the 5 reasons why you should have Lasting Powers of Attorney.

5. Get Some Help

Similar to when you fly on a plane, you must put on your own oxygen mask before helping others. Ensure that you are financially secure before helping others. Your financial planner will help you to determine what is it that you want to achieve in the future and can collaboratively develop a plan for you to achieve this.

Partnering with a chartered financial planner can mean you have an unbiased sounding board to bounce ideas off.

If you would like to speak to one of Capital’s chartered financial planners about how you can afford to help and support your family, contact us today.


The Financial Conduct Authority does not regulate tax advice or estate planning. The value of your investments and the income derived from them can fall as well as rise. You may not get back what you invest.

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