http://www.telegraph.co.uk/finance/p...it-crisis.html
'Babygloomers' emerge as most striking phenomenon of credit crisis
More than three million people are having to help their parents financially as the savings crisis engulfs a generation of Britons, research has revealed.
A Daily Telegraph survey - the first of its kind since the recession began - highlights the heavy toll being taken on Britain's so-called "Babygloomers".
Almost one in ten adults are having to contribute to their parents' upkeep, the research found. The Norwich Union research suggests more than 1.3 million adults aged between 17 and 65 are paying their parents more than £250 each month, with some paying up to £1,000.
Many pensioners have found themselves struggling as their income from savings has virtually disappeared following the drop in interest rates. As a result, they have been forced to turn to their children for help.
The Babygloomers - defined as those who are having to support both their own children and their parents - are being stretched to the limit as they also struggle to cover the cost of their own family, which often includes grown up children who cannot to afford to leave home.
They have had also had to cope with an increase in their own cost of living as the recession takes hold.
Financial experts and politicians noted that a 'sandwich generation' of adults squeezed between their parents and children has become one of the most striking phenomenons of the credit crisis.
They warned that it is expected to become more pronounced as the economic downturn worsens.
Dominic Fraser-Smith, a product manager at Norwich Union, said: "An increasing number of people are facing the dual emotional and financial challenges of caring for two sets of dependents. This has become one of the most striking side-effects of the economic downturn."
The Daily Telegraph is calling for pensioners to be given a tax cut on the income earned from their savings and investments through its Justice for Pensioners campaign.
Norwich Union surveyed a total of 1,800 adults for the research and found that 7.9 per cent give money to their parents.With 40,101,000 adults between 17 and 65 living in the UK, that would mean the number supporting their parents is 3,167,979.
Two thirds of those surveyed said they would like to support their parents financially but are unable to do so due to their own financial situation. Only a quarter have a pension and a robust financial plan for their own retirement.
It also indicated that 60 per cent worry that their parents will not be able to afford to stay in their existing home.
George Osborne, the Shadow Chancellor, said: "This important research reveals the damage that 12 years of a Labour Government has done to Britain's savings culture.
"The real lesson from the current economic mess is that we need to move from an economy hooked on debt to an economy built on savings and good pensions."
The research also revealed that two thirds of those surveyed would like to support their parents financially but are unable to do so due to their own financial situation.
It also indicated that 60 per cent worry that their parents will not be able to afford to stay in their existing home.Savers are facing the lowest average rates of returns on record, according to the Bank of England, with rates as low as 0.29 per cent being offered on some types of account.
It means that many current accounts offer better rates than some savings accounts, according to research by price comparison website Moneyfacts.
Savers can take advantage of rates of up to 6 per cent by switching some of their money into a current account.
Tim Newhouse, of price comparison site Moneysupermarket.com, highlighted the impact of falling savings rates, saying: "While the banks are being bailed out by the Government, it is the decisions of the Bank of England that are forcing millions of adults to bail out their ageing parents.
"When you rely on your savings to survive, plummeting interest rates do nothing but harm. This loss of income for the elderly has to be made up somewhere and now it is falling on the shoulders of their offspring."
He went on to say: "The test of a society is how it treats the elderly – and society is being sorely tested right now."
However, one of the positive aspects to emerge out of the difficulties facing Babygloomers is the sense of strengthened community spirit, charities said.
Jonathan Werran, of the poverty charity Elizabeth Finn Care, said: "One benefit arising form the recession is the greater inter-generational cohesiveness, which can only bode well for society."
Many middle-aged parents are seeing their grown-up children return home to live with them because they are unable to find a sufficient deposit to buy a home of their own.
The credit crisis has seen mortgage finance dry up, with lenders limiting their most preferential home loans to those with a deposit of at least 40 per cent.
Melanie Bien, of mortgage brokers Savills Private Finance, said: "The Babygloomers have a huge responsibility on their shoulders. They are being squeezed in two directions - on one side by their children who need help with their mortgage or getting on the housing ladder, and on the other by their parents who are suffering from restricted income because of the low return on savings rates."
Pensions experts warned that while it was understandable that people wanted to support their parents, there is a risk that this could leave their own pension plans in ruin.
Tom McPhail, a pensions expert at wealth managers Hargreaves Lansdown, said: "Societies operate on the basis of wealth flowing between generations, with families helping each other out at different stages of life. This system has broken down and the parents of today are trapped in the middle. The retired generation can't afford to support itself and so needs help; the children of today can't get jobs and so they need help; in the meantime, the parents of today also know that they must save for their own retirement because when they do get to old age the government of tomorrow won't have any money left to look after them."
A Treasury spokesman said: "Since 1997 disposable household income has increased by a third and the government has taken significant steps to support people to save as much of that extra income as possible."
'Babygloomers' emerge as most striking phenomenon of credit crisis
More than three million people are having to help their parents financially as the savings crisis engulfs a generation of Britons, research has revealed.
A Daily Telegraph survey - the first of its kind since the recession began - highlights the heavy toll being taken on Britain's so-called "Babygloomers".
Almost one in ten adults are having to contribute to their parents' upkeep, the research found. The Norwich Union research suggests more than 1.3 million adults aged between 17 and 65 are paying their parents more than £250 each month, with some paying up to £1,000.
Many pensioners have found themselves struggling as their income from savings has virtually disappeared following the drop in interest rates. As a result, they have been forced to turn to their children for help.
The Babygloomers - defined as those who are having to support both their own children and their parents - are being stretched to the limit as they also struggle to cover the cost of their own family, which often includes grown up children who cannot to afford to leave home.
They have had also had to cope with an increase in their own cost of living as the recession takes hold.
Financial experts and politicians noted that a 'sandwich generation' of adults squeezed between their parents and children has become one of the most striking phenomenons of the credit crisis.
They warned that it is expected to become more pronounced as the economic downturn worsens.
Dominic Fraser-Smith, a product manager at Norwich Union, said: "An increasing number of people are facing the dual emotional and financial challenges of caring for two sets of dependents. This has become one of the most striking side-effects of the economic downturn."
The Daily Telegraph is calling for pensioners to be given a tax cut on the income earned from their savings and investments through its Justice for Pensioners campaign.
Norwich Union surveyed a total of 1,800 adults for the research and found that 7.9 per cent give money to their parents.With 40,101,000 adults between 17 and 65 living in the UK, that would mean the number supporting their parents is 3,167,979.
Two thirds of those surveyed said they would like to support their parents financially but are unable to do so due to their own financial situation. Only a quarter have a pension and a robust financial plan for their own retirement.
It also indicated that 60 per cent worry that their parents will not be able to afford to stay in their existing home.
George Osborne, the Shadow Chancellor, said: "This important research reveals the damage that 12 years of a Labour Government has done to Britain's savings culture.
"The real lesson from the current economic mess is that we need to move from an economy hooked on debt to an economy built on savings and good pensions."
The research also revealed that two thirds of those surveyed would like to support their parents financially but are unable to do so due to their own financial situation.
It also indicated that 60 per cent worry that their parents will not be able to afford to stay in their existing home.Savers are facing the lowest average rates of returns on record, according to the Bank of England, with rates as low as 0.29 per cent being offered on some types of account.
It means that many current accounts offer better rates than some savings accounts, according to research by price comparison website Moneyfacts.
Savers can take advantage of rates of up to 6 per cent by switching some of their money into a current account.
Tim Newhouse, of price comparison site Moneysupermarket.com, highlighted the impact of falling savings rates, saying: "While the banks are being bailed out by the Government, it is the decisions of the Bank of England that are forcing millions of adults to bail out their ageing parents.
"When you rely on your savings to survive, plummeting interest rates do nothing but harm. This loss of income for the elderly has to be made up somewhere and now it is falling on the shoulders of their offspring."
He went on to say: "The test of a society is how it treats the elderly – and society is being sorely tested right now."
However, one of the positive aspects to emerge out of the difficulties facing Babygloomers is the sense of strengthened community spirit, charities said.
Jonathan Werran, of the poverty charity Elizabeth Finn Care, said: "One benefit arising form the recession is the greater inter-generational cohesiveness, which can only bode well for society."
Many middle-aged parents are seeing their grown-up children return home to live with them because they are unable to find a sufficient deposit to buy a home of their own.
The credit crisis has seen mortgage finance dry up, with lenders limiting their most preferential home loans to those with a deposit of at least 40 per cent.
Melanie Bien, of mortgage brokers Savills Private Finance, said: "The Babygloomers have a huge responsibility on their shoulders. They are being squeezed in two directions - on one side by their children who need help with their mortgage or getting on the housing ladder, and on the other by their parents who are suffering from restricted income because of the low return on savings rates."
Pensions experts warned that while it was understandable that people wanted to support their parents, there is a risk that this could leave their own pension plans in ruin.
Tom McPhail, a pensions expert at wealth managers Hargreaves Lansdown, said: "Societies operate on the basis of wealth flowing between generations, with families helping each other out at different stages of life. This system has broken down and the parents of today are trapped in the middle. The retired generation can't afford to support itself and so needs help; the children of today can't get jobs and so they need help; in the meantime, the parents of today also know that they must save for their own retirement because when they do get to old age the government of tomorrow won't have any money left to look after them."
A Treasury spokesman said: "Since 1997 disposable household income has increased by a third and the government has taken significant steps to support people to save as much of that extra income as possible."
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