Clients are dipping into their pensions to help family out during the cost of living crisis, according to new research.
More clients are worried about their children’s financial predicament than their own, the survey suggests.
When mutual life and pension provider Royal London surveyed financial advisers about the issue, more than half said clients are more worried about their family’s finances.
Advisers said a quarter of pension requests are from clients who want to release money for their adult children.
More than half have clients who are tapping into their pension savings to boost their disposable income and, of those, a fifth are taking an additional lump sum from their pension pot to help other family members with the cost of living.
The survey of more than 200 financial advisers carried out by Royal London revealed interesting insight about the impact the cost of living was having on their clients.
The top request from clients, in the context of the cost of living crisis, was to help make sure investments kept up with inflation, according to two fifths of advisers.
In terms of accessing additional money, over half of advisers have clients who are tapping into their pension savings to boost their disposable income, with around a third increasing the amount of drawdown cash they took.
A third took an additional lump sum for themselves and about a fifth took a lump sum specifically to help their children.
While clients are worried about the impact on their children and have a strong desire to help them, they are also very conscious about running out of money over the course of their retirement.
Clare Moffat, pensions expert at Royal London said: “For today’s young adults, life long-term financial planning looks very different to the journey their parents took.
“Reaching key financial milestones, like buying a house, involves a much longer wait than previous generations.
“While it’s natural for parents to help, the right balance needs to be struck.”
Royal London commissioned a survey by Opinium between 1 and 6 March 2023, with a sample of 218 financial advisers.
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