A third (34%) of those planning to retire in 2020 continue to financially support their families with regular handouts amounting to over £3,700 per year, according to the latest research by Key.

Based on a national study of over 1,000 people who had decided to finish work in 2020, this research focuses on their financial security and retirement planning.

With retirees planning on an average retirement income of £20,663, a figure that may drop due to the impact of the pandemic, the research suggests that they anticipate they will be using almost a fifth (18%) of this income (£3,700) to support the finances of younger family members.

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This equates to £311 per month on average, although one in eight (12%) contribute £500 or more each month, equating to £6,000 per year.

Around 28% allow their family to live with them rent free, whilst one in four (24%) give them regular cash to cover everyday living costs and 15% put money towards supporting their grandchildren.

One in five (20%) also help their loved ones by covering some or all of their household bills, whilst 19% pay for treats such as holidays.

In addition, 15% of potential retirees say they have already helped to fund a deposit or put money towards the purchase of a property and 13% pay for university fees or associated living costs.

Will Hale, chief executive at Key, said: “Whilst many older people enjoy treating their loved ones – even if it is just paying for a nice meal – a third of those who intend to retire in 2020 are doing more than this – regularly topping up their wider family’s finances.

“The current economic situation is likely to place even more pressure on people’s finances but with the pandemic impacting pension savings this could see some retirees having to tighten their belts and could impact their ability to continue to support younger generations.

“It is important that families have open discussions about their finances.

“Many younger people would be horrified if they knew older members of their family were struggling due to their generous natures.

“Taking the time to speak to a specialist adviser is a sensible step to look across all your assets and understand how much support you can provide.

“Using housing equity is one way older people can continue to support family and/or top-up their own income.”