Almost half of British millennials are turning to family support to plan for retirement

The idea of retiring comfortably on a well-funded pension is becoming a distant dream for many millennials and Gen Z in the UK. Faced with rising living costs, stagnant wages, and a housing market that feels increasingly out of reach, younger generations are grappling with financial challenges their parents may not have faced to the same extent.

In this context, a striking new trend has emerged Britons in their 30s and early 40s are increasingly looking to their parents to help fund their retirement. For many, this isn’t just a backup plan—it’s the plan. Our recent study highlights the growing dependence on intergenerational wealth transfers, with a large number of people relying on inheritances, parental savings, and even financial gifts to bridge the gap in their pension planning.

This shift raises important questions about the future of retirement planning in the UK, the toll on families, and what it means for the younger generations who may lack financial independence in their later years.

Key findings the numbers speak volumes

• 38% of 30- to 44-year-olds admit they are counting on their parents’ money to bolster their retirement funds.
• 56% go further, stating that an inheritance from their parents will be their primary, if not sole, source of retirement income.
• 19% expect a financial boost from their parents’ passing, while 4% have already mentally allocated their parents’ savings and pensions to their retirement plans.
• Without parental support, 40% say they would struggle to retire at all.

Even with the anticipated financial assistance, challenges remain. A sobering 8% say they have no clear plan for retirement, and 30% believe they will never have enough to stop working and retire comfortably.

The emotional and practical burden

The survey also highlights the emotional toll this reliance can bring. Almost half (46%) feel embarrassed accepting money from their parents, while 41% feel guilty, and a third (33%) express frustration over their inability to fully support their own families.

Yet, for some, it’s seen as an inevitability. Nearly one in five (19%) believe it’s reasonable to ask their parents for money, given they expect it to be theirs eventually.

Working beyond retirement age

As uncertainty looms, many foresee extending their working years

• 29% believe they’ll need to work part-time past retirement age.
• 16% think they’ll have to continue working full-time.

Meanwhile, despite the rising state pension age — set to hit 68 by 2037 — many younger Britons still hope for an earlier retirement

• 18- to 29-year-olds dream of retiring by 65.
• 30- to 44-year-olds aim for 67.

Economic challenges and generational divide

Carina Chambers, our Pensions Technical Expert, comments “In today’s economic climate, an increasing number of millennials are turning to their parents’ savings and pension funds as a crucial resource for their own retirement planning. This reliance highlights the financial hurdles faced by younger generations, such as escalating living expenses, inflation, and a competitive housing market.”

A sense of envy also taints the younger generation’s perspective on retirement. Nearly two-thirds (63%) think their parents had an easier time planning for their later years, with Millennials and Gen Z particularly envious of their parents’ financial stability.

The reality of financial anxiety

Retirement worries are widespread, with 69% of working Brits concerned about how they’ll afford to stop working. These anxieties are particularly pronounced among 18- to 44-year-olds, who report worrying about their financial futures an average of 17 times a month.

Despite automatic enrollment into workplace pensions and opt-in employee contributions, the data shows a significant portion of the population remains unsure about their retirement prospects.

Taking control of your financial future

This research serves as a wake-up call for many. While intergenerational wealth may provide some relief, relying on it as a sole strategy is risky, as it could be spent in their parents’ lifetime on costly care or medical expenses. Building a robust retirement plan starts with early planning, informed decisions, and taking advantage of tools and resources that can help grow your pension pot.

At Moneyfarm, we understand the challenges people face and offer tailored solutions to help secure your financial future. Whether it’s through investments, pensions, or expert guidance, we’re here to help you take control of your retirement planning today.