The pandemic has seen over 50s lend a total of £8.2bn to relatives to support them since the start of the crisis, according to research from OneFamily.
The financial services firm found that while the under 30s have been most impacted financially by the pandemic, parents and grandparents have been dipping into their savings to help them.
One in four (25%) over 50s have provided financial support to their family members since the start of the coronavirus pandemic, with £1,298 being lent on average per person during that time.
Some 44% said that they have lent more money this year than the last.
But this lending didn’t come without consequences – 44% said they put a strain on finances in order to lend money to family, with almost one in four (21%) admitting to having felt pressure to step in and help members financially.
As a result, there is likely to be an increased need for financial advice and potentially measures such as equity release to free up funds as the pandemic wears on.
The data showed that close family was at the top of the chart for receiving funds, with those over 50s who lent money saying they did so to help their sons (39%) and daughters (45%). Female family members seemed to have been the most affected by the pandemic’s squeeze on finances.
Seeing younger generations suffer a decrease in income (34%) was the key reason given for this intergenerational lending, with family members getting furloughed (18%) or losing their jobs (14%) also key factors.
People over 50 have been withdrawing money from savings accounts (53%) and their current accounts (37%) in a bid to financially prop up their families. Credit cards also didn’t remain untouched, with older generations resorting (5%) to raiding them to help their loved ones, and some (2%) of the over 50s even had to sell their belongings to be able to get out some extra cash.
Iain Clark, OneFamily’s, director of lending and insurance, said: “When we think about the pandemic’s financial effects, we think of the Millennials, who have been some of the most severely impacted.
“However, as our research shows, the over 50s have felt a great pressure to support their families too.
“Now, more than ever, Generation X and Baby Boomers need to have expert guidance and support from advisers.
“The past year has had a great impact on everyone’s lives, and even if the country is expected to start recovering economically from the pandemic’s effects, the strain on people’s finances is still expected to be felt for the months to come.
“Our research suggests that people are taking out credit, dipping into their ISAs and even selling belongings to support their families through these tough times. Financial advice is going to be absolutely crucial for people so that they can find the right product for their needs.
“Options such as releasing the wealth that’s tied up in their property might be one solution – allowing a living inheritance at the time when family members are most in need, without impacting on day-to-day finances.
“In some instances, it’s also possible to make a payment towards the interest each month, preventing a roll-up of the borrowing to reduce the impact on the inheritance that younger generations will receive.”