How being an older parent could reshape your retirement and inheritance plans

Compared to your parents or grandparents, you may have had children “late” – perhaps in your 40s or 50s, rather than your early 20s.

With advances in healthcare, and less pressure to marry and settle at an early age, it is perhaps unsurprising that the Office for National Statistics (ONS) has observed a rise in older parenthood. 2024 figures suggest that the average number of parents in their 20s decreased, while those in their 30s increased. What’s more, there was a 14.2% increase in the number of new fathers over 60 compared to 2023.

Plus, blended families – those with children from multiple marriages or relationships – are now commonplace. If you remarry in your 40s or 50s, you may choose to have children with your new partner.

Being an older parent may mean you’re less susceptible to the opinions of others, and you may have greater life experience to impart to your little ones. From a financial perspective, you could be in a more comfortable position from the outset.

On the other hand, you may find that having children later in life could affect your retirement and inheritance plans.

Let’s explore this in greater detail.

Retirement

If you have a child at 40, you could be on the cusp of retirement when they decide to leave home.

This is especially relevant in an age where young adults are spending more time living with their parents. Between 2011 and 2021 in England and Wales, the ONS reports that:

• The share of 20 to 24-year-olds living at home rose from 44.5% to 51.2%
• The share of 25 to 29-year-olds living at home rose from 20.1% to 26.7%.

As such, you could still have children living at home when you retire. Financially speaking, there are pros and cons to this scenario.

Pros

• Your adult children may pay rent and contribute to the household, lowering your costs.
• You could find the transition into retirement easier with the company of your children.
• You may be able to travel with your spouse and leave your home in the care of your children.

Cons

• You may need to use retirement savings to support your children.
• You could dip into your long-term savings when your children choose to move out – to provide a home deposit, for example.

Even if your children leave home at 18, they may want to pursue further education or be at the start of their career in a lower-paid position. All of this could mean you’re providing financial support even after you retire.

In any case, it is worth preparing yourself ahead of time. While some retirees have children already established in their adult lives – with families and homes of their own – you could be required to provide additional support well into retirement.

It may be wise to:

• Increase your pension contributions if you can
• Claim your marginal rate of tax relief on contributions through self-assessment
• Use your ISAs for tax-efficient saving and investing
• Consider the benefits of retiring a few years later, if necessary.

Speaking to a financial planner could help with the above.

Inheritance

If you still have children at home into your 60s or even beyond, you may deplete your retirement savings more quickly than you had hoped.

You may also have delayed downsizing your home to maintain space for your children.

These are just a few examples, but just as having children later can affect your retirement, it may also influence your inheritance plans – also known as your “estate plan”.

As you age, you will likely be thinking about:

• What you want to leave behind when you pass away
• Who should inherit your money and assets.

But if your children are still relatively young when you pass away, perhaps in their 20s or 30s, you may need to think even more carefully about how you’ll transfer your estate.

Writing a will

Every adult should have a will – it’s important to prepare for the unexpected. But if you’re an older parent who is concerned about passing away when your children are still relatively young, this becomes even more essential. Without a will, your estate could be divided according to intestacy law, creating stress and uncertainty for your young beneficiaries.

Putting additional financial guardrails in place

Beyond deciding who should inherit what, it may be worth thinking about how your beneficiaries would cope with a large windfall.

For instance, if your child was 30 years old when you passed away, they could find it overwhelming to handle significant wealth and complex assets.

You could consider:

• Choosing an experienced executor to handle your estate, removing undue stress from your children’s shoulders
• Ringfencing some wealth in trust, with clear stipulations for when and how the money should be accessed or used
• Talking to your beneficiaries about your decisions sooner rather than later to avoid confusion down the line.

These additional steps could give you ultimate peace of mind.

Get in touch

Whatever shape or size your family takes, financial advice could help you set up a secure future.

Email us at hale@kelland.co.uk, or call 0161 929 8838.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

The Financial Conduct Authority does not regulate will writing, trusts, or estate planning.

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