Looking after the sandwich generation

Who are the sandwich generation?

Around 1.3 million people in the UK* have the double responsibility of looking after children under the age of 18 and caring for elderly parents. This number mostly includes people between 40 and 50 years old.

Due to the increase in life expectancy and for some, the delay in starting a family as they have chosen to focus first on establishing their career, the numbers in the sandwich generation can only get higher.

The costs involved

Caring for parents comes with unplanned additional costs and a pressure on time to help shop, cook, clean and provide transport for appointments. For many people, this leads to requests for flexible working hours, a permanent reduction in hours or even leaving work altogether. The latter two options would of course lead to a reduced income or your income from employment stopping completely.

So how can you best prepare yourself for this?

Looking after yourself

Just as you’re told to put on your own oxygen mask first in an airline safety demonstration, the same goes for being a part of the sandwich generation – you need to look after yourself before you can look after your loved ones.

Financial planning for you

It might be tempting to reduce or stop any pension contributions, but where possible, if you can continue, it makes sound financial sense. You could end up caring for your parents for many years and if you are not paying into your pension during this time, it could have a massive impact on your own retirement plans.

Although it’s not always the most comfortable of subjects, it’s vital that where possible, you talk to your parents about your own financial situation along with theirs. Most people’s parents do not want to be a financial drain on their children and will want to pay towards any costs, if not cover them entirely, if they can afford to do so.

It’s also important that you discuss the possibility of setting up a power of attorney for your parents. This will allow you act on their behalf if they become physically or mentally unable to do so themselves. In order to save yourself from unnecessary additional worry, stress and potential cost, it is essential that the power of attorney is registered at a time when your parents have the mental capacity to make important decisions, in case they become ill at any point in the future and are unable to do so.

Many people in this situation find it helpful to seek professional financial advice. A financial planner will work with you to review your own finances and see if you can afford to reduce your working hours without derailing your own financial plans through the use of cashflow modelling. They can also work with the whole family and steer a productive discussion to establish a way forward that is agreeable with everyone.

Life insurance and critical illness cover

It’s important for everyone to think about how their family would cope financially if they were to become ill or die, but it is even more so for people who are a part of the sandwich generation. In 2019**, those in the 40 to 59 age range, typically the age of the sandwich generation, were twice as likely to experience a critical illness between the ages of 40 to 49, rising to three times for ages 50 to 59, compared to people under the age of 40 or over 60.

In this situation, many people would be unable to work, let alone care for children and parents. It’s important to think about how your family would cover your loss of income. Even if you are not working and instead are focusing on caring for your children and parents, you need to think about how that care would be paid for if you were unable to provide it yourself. A payout from a life insurance or critical illness plan could help to cover the loss of income or pay towards child or adult care. A financial planner can advise you on what type of cover is suitable for you and your family.

Thinking about your mental health

In the midst of looking after other people, it is essential that you look after your mental health as well as your physical health. The pressures of being a part of the sandwich generation cannot be understated. Many life insurance providers have helplines available to their policy holders where they can talk about how they feel and get the support they need. When taking out an insurance plan, look to see if this is one of the benefits to your policy.

Making provisions for your own future care

Many people who are a part of the sandwich generation do not want to put their own children in a similar position to the one they are in themselves. If you don’t want to rely on your children for your future care, it’s important to think about how you would cover the cost of your care yourself. With the cost of care ever-rising, it’s important to start planning how you will pay for it now.

Speak to Tilney

Our financial planners work with individuals and their families to establish financial plans which are suitable for everyone. For more information on how they could help you, book a free initial consultation online. You can also call us on 020 7189 2400.

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* Source: Veritas Care, 2019

** Source: Royal London, 2019

Issued by Tilney Financial Planning Limited