A new study looks at how retirement plans are expected to change. One trend appears clear: retirees expect to spend significantly on supporting other generations of their families.

Some 55 per cent) of future UK retirees expect to provide support in their retirement to other generations over the next 10 years, compared with 37 per cent of current retirees. The trend will unfold as the UK population ages, a study from St James's Place finds. It says nearly one million families will have several generations in retirement at the same time within the next 10 years. 

The UK wealth manager said it expects that by 2029, 963,000 families will contain more than one retired generation – rising 18 per cent rise on the figure of 813,000 multi-retiree families that exist now, with growth becoming steadily more dramatic as time goes on. Nearly 1.4 million families are expected to contain more than one retired generation by 2044.

The findings underscore how, with an ageing population caused by rising lifespans and falling birthrates, the economic pressures to pay for old age are shifting. This is a hot political issue in the UK, highlighted by controversy over any plans to erode pension savings' tax breaks, for example, in order to lighten tax burdens on the young. The phenomenon of "multi-retiree" families may also affect asset allocation and financial risks.

The research was conducted for St James’s Place by Opinium covering 4,000 UK adults between 27 February to 8 March 2024.

Future retirees expect to pay for other generations' everyday living costs (22 per cent), buying a house or paying off a mortgage for someone (16 per cent) or paying for childcare (14 per cent), the study shows. Other common ways people expect to help include paying for a holiday and educational fees (14 per cent respectively).

Future retirees are also shifting plans for later life so that they can financially support others, with 14 per cent planning to work in retirement to supplement income, and 12 per cent delaying retirement to build a bigger pot.

More than one million families are also expected to contain more than one retired generation by 2034 – a 32 per cent increase on the 813,000 multi-retiree families that exist currently, the firm said. The growth rate of multi-retiree families is increasing faster than previously predicted, the firm added.

“With people living longer, retirement provision more and more becoming the responsibility of the individual, and the economic landscape evolving, the way we need to think about planning for the future has fundamentally shifted. The next generation of retirees can’t expect to follow the same path as those currently in retirement,” Claire Trott, divisional director for retirement and holistic planning at St James’s Place, said.

“Our approach to retirement planning must change. Putting in place the right plans at an early stage will allow greater opportunity to build wealth over time and leave behind as much as possible when you’re gone, without making unnecessary sacrifices along the way,” Trott added.