One in three people set for retirement this year are paying out around £260 a month to support their families, according to new research.
The financial commitment is squeezing their retirement income, says financial firm The Pru.
Retirees are most likely to support their children and their partners (45%), but grandchildren (24%), parents (9%) and grandparents (4%) also have a call on the cash.
Surprisingly, the money does not go to one person but an average of four.
The reasons for handing over the cash range from helping with day to day living costs (22%) and paying bills (14%).
Buying cars and holidays
One in five retirees (20%) fork out for luxuries by treating their relatives to holidays or a new car, while 11% look after club memberships or subscriptions for them.
Some retirees (7%) support more than one generation of their family by paying living costs for children while contributing to long term care for their parents or grandparents.
Their increased spending is not stopping most retirees from planning to leave an inheritance. A third expect to pass on estates averaging £173,000.
Kirsty Anderson, a retirement income expert at Prudential, said: “With life expectancy increasing rapidly it is not unreasonable to expect the members of the Class of 2017 to be looking forward to a retirement that will last 20 years.
Financial support is expensive
“However, for those providing financial support to their dependents it is likely to cost them an average of £62,000 over the course of their retirement – accounting for a significant proportion of their pension pot and impacting the income they can expect to live on.
“The money you give to support your loved ones is an element of retirement budget planning that is easy to overlook, and when looking to understand the likely amounts of money you’ll need in retirement.”
Anderson also explained saving as much as possible makes supporting others easier in old age.
“For most people who are still in work it is never too late to make a difference to the quality of retirement you can look forward to,2 she said.
“Saving as much as possible as early as possible in your working life should give you the best possible opportunity to build a substantial pot to support you and your family in the future.”