You have probably heard of the “sandwich generation”. I am never quite sure who coins these terms but this is one of the better ones.
There are a growing number of people who are being squeezed from both sides: they have children who are still financially dependent and they have ageing parents who need to be cared for.
Recent research we have undertaken found that one in five workers aged over 50 – the equivalent to almost two million people in the UK – say their children’s or parents’ financial needs are the only reason they are still working.
More than a third of workers over-50 with dependents say they will retire later than they had expected because of the financial support their children need.
One in five also say they have sacrificed their ability to save for a more comfortable retirement to support their adult children, while one in 10 have stopped saving completely to support children and parents who are financially dependent on them.
That last figure is pretty alarming. People have stopped saving for their own retirement because of the financial burden they face in supporting their family.
The statistics demonstrate how important it is for an adviser to have the full picture when dealing with a client. The pounds and pence in pensions and investments only tell part of the story.
Being an adviser can sometimes be a bit like being a counsellor. You are dealing with people’s hopes, dreams and fears, and often delicate family matters that even their closest friends are not aware of.
Handling these situations sensitively and with careful consideration is vital. But having a grasp on the wider issues facing society means an adviser can know some of the key questions to ask when speaking to a client.
These are not easy questions. Clients will need to imagine scenarios they hope will never happen. “If your parents need full time care, who will pay for that?” “If something happens to you, who will be responsible for taking care of your children and/or your parents?”
All of that said, the report also revealed some much more positive experiences for the over-50s.
Two in five of that demographic are motivated to stay in work because of job satisfaction and fulfilment. That rises to more than half of people aged 65 to 69 and two thirds of the over 70s.
One in seven older workers have also become their own boss since turning 50. That is the equivalent to 1.4 million people becoming self employed or setting up their own business. The research also found that two in five over 50s have made a significant career change since their 50th birthday.
Of course, clients can never be pigeon-holed. Every person will have their own individual circumstances that will dictate what actions they need to take to achieve their best financial future. But an appreciation of trends among the over 50s – the sandwich generation and those looking to make significant changes in their career or working habits – can put advisers on the front foot when building those all-important relationships.
John Lawson is head of financial research at Aviva