Caring for parents and children: How the sandwich generation can protect their finances

It can be tempting to reduce the amount you pay into your pension or dip into your savings to help family members.

Rear view of grandmother, mother and son walking in the park.

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Published: June 5, 2026 at 12:28 PM

Many people reach midlife expecting that, after years of working hard and raising a family, they'll finally have more time and money to focus on their own future.

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Instead, a growing number find themselves responsible for both children and ageing parents, placing huge financial and emotional pressure on them.

Known as the 'sandwich generation', many of these adults belong to Generation X (born between 1965 and 1980). They are often helping elderly relatives with care costs and practical support while also providing financial assistance to children who remain dependent on them for far longer than previous generations.

The problem

Children are increasingly living at home well into their 20s and even 30s as they struggle to find affordable housing or employment. Rising rents, high property prices and the increased cost of living mean many parents continue providing support long after their children reach adulthood. According to the Office for National Statistics (ONS), 35% of men aged 20 to 34 were living with their parents in 2025, compared with 22% of women of the same age.

At the same time, people are living longer, meaning ageing parents may require care, financial help or assistance managing their affairs for many years. ONS projections suggest life expectancy at birth is around 83.8 years for women and 80 years for men.

The financial demands of supporting two generations can make it much harder to prioritise long-term goals such as retirement saving. A recent report by the Pension Commission found that Generation X are among those most at risk of not having saved enough for retirement.

Pension Guide: Our free Radio Times pension guide provided by Pense walks you through everything you need to know

This is not only because they face the challenges of caring for both the younger and older generations, but also because many missed out on generous final salary pensions while also being too old to benefit fully from automatic enrolment into workplace pensions, which was introduced in 2012.

Rebecca Williams, financial planning divisional lead at Rathbones, says: "Many Gen Xers are sleepwalking into retirement with far less financial security than their parents. They came of age as defined benefit pensions were disappearing and have since faced years of stagnant wage growth and repeated financial shocks, making it harder to build robust, long-term savings.

"This cohort also represents a large part of the sandwich generation, juggling day-to-day costs while supporting both ageing parents and children. As a result, boosting retirement savings can be difficult amid ongoing financial pressures."

Separate analysis from PensionBee found that savers over 50 have significantly smaller pension pots than they need, with women holding an average of £30,644 compared to £54,512 for men.

A confident female pensioner using computer indoors.

Make sure you protect your retirement savings. Getty Images

What you can do

Seek financial support

Check whether you're entitled to financial support. If you're providing unpaid care for someone for at least 35 hours a week, you may be eligible for Carer's Allowance, currently worth £86.45 a week.

Your savings don't affect eligibility, although your earnings might. It's also worth checking whether the person you're caring for is receiving all the benefits they're entitled to, such as Attendance Allowance or Pension Credit.

Protect your retirement savings

It can be tempting to reduce the amount you pay into your pension or dip into your savings to help family members. However, reducing pension contributions doesn't just mean saving less yourself, you could also miss out on valuable employer contributions and years of investment growth.

Discuss lasting power of attorney

One of the most important conversations to have with ageing parents concerns lasting power of attorney (LPA).

An LPA allows someone to appoint trusted people to make decisions on their behalf if they lose mental capacity in the future. There are separate LPAs covering property and financial affairs, and health and welfare decisions.

Having an LPA in place doesn't mean your parent gives up control of their affairs. Instead, it provides reassurance that, if decisions need to be made in the future which they are no longer capable of making themselves, the people they trust can act on their behalf without lengthy legal delays.

Make time for yourself

When you're caring for multiple generations, your own wellbeing can easily fall to the bottom of the list.

Try to set aside regular time for activities you enjoy, whether that's exercise, meeting friends, volunteering or pursuing a hobby. Even a few hours a week away from caring responsibilities can help reduce stress and prevent burnout.

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Caring for parents and children: Your essential checklist

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