Australian parents and grandparents are concerned for the next generation’s financial future, with 96% fearing their children and grandchildren either won’t be financially secure, afford a property or secure a good education in the years ahead.
The Generation Life Saving for the Next Generation report surveyed more than 1000 grandparents and parents and found that 52% worried their grandchildren or children would not be able to afford property or live comfortably when they reached adulthood.
Despite considering the financial wellbeing of the next generation a top priority, 53% are not currently saving to support their children financially and two thirds wished they had started earlier - 10 years on average.
Only 15% of grandparents admitted they are saving for their grandchildren’s future, with half believing they should have started at least 12 years earlier.
Catherine van der Veen, joint CEO and managing director of Generation Life, said the research highlights that in the face of continuing economic challenges, grandparents and parents feel the next generation won’t have enough financial support when it comes to significant life moments.
“More than ever, the next generation are going to need help to pay for their education and to get into a house,” she said. “With the median property in Sydney now surpassing one million dollars, parents and grandparents are stepping in to help with one third of parents saving towards a first property for their children.
“With cost of living pressures and the continuous rise of education costs, parents are prioritising saving for their children’s school and university fees, but the research shows many are not looking at the most effective strategy to achieve this goal.”
Of the respondents that are currently saving for their grandchildren’s financial future, nearly half of grandparents – 48% - are using cash and term deposits, followed by managed fund – 14% - and property investments - 12% - whereas parents are favouring cash and term deposits – 59%.
Generation Life’s joint CEO and managing director Lucy Foster believes that investment bonds are a secret savings weapon for those who want to help children and grandchildren with the daunting costs of education and buying a home.
She said, “For the half of Aussies using cash to save, this could be an ineffective way of trying to reach their long-term financial goals – there are better ways to make money work harder. We know baby boomers in particular are looking for smart ways to make the most of their money, but our research indicates one third of Australians have never heard of investment bonds.”