People from the sandwich generation - those who had competing demands and financial responsibilities for both younger and older generations - have an increasing desire to be prepared for financial independence in retirement.
About 70% of them believe that children should not have to support their parents later in life if they have not sufficiently prepared for their retirement.
This was according to a study by St James’s Place Asia which surveyed 1,021 members of the sandwich generation in Singapore (520) and Hong Kong (501).
The study, titled ‘A Generation Under Pressure: Asia’s Sandwich Class’, also showed that the pressures of supporting parents and children on the sandwich generation remain in Singapore and Hong Kong, with 64% feeling it is their duty to financially support their parents however they need, although for 30% this only applies for critical and urgent items.
While caring for parents is a top priority, 64% and 58% of those surveyed in Singapore and Hong Kong respectively feel that providing financial support for their parents is hampering their own financial achievements.
In both markets, 65% also feel this is reducing their ability to save for a retirement and the future for their children that they hope for.
In fact, 57% believe that their parents retired too early, and 55% harbour some level of frustration for the financial support they now need to provide for them.
To prioritise both the needs of their children and parents as well as themselves, the study finds that the current sandwich generation is working harder but saving less.
About 77% believe that investing in their children’s future places pressure on other areas of their financial planning, while 75% are concerned that their children will require and request more financial support than they can provide in the future.
Interestingly, this group faces a conundrum as 67% feel their children’s financial needs should take precedence over their parents’, but 74% are also concerned about providing children with too much financial support and spoiling them.
Intergenerational wealth and succession planning have grown in importance for the sandwich generation with 51% having made plans to transfer their wealth and assets to family members, but only 32% intend to do this within the next five to 10 years.
While 80% believe that their family is effective and organised in their approach towards intergenerational wealth planning, 68% lack understanding about how to manage their intergenerational wealth transfer effectively. About 68% also do not have adequate knowledge around the tax implications of succession planning.
Given their unique set of financial problems, those in the sandwich generation in Hong Kong and Singapore are more likely to seek financial advice, with 85% saying they seek financial advice before making important decisions, compared to 78% across the general population.