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44 Years Old - The peak of financial responsibility

Press release: 29/10/2015

  • 44 the point in our lives when we have the most financial responsibilities
  • Nine key responsibilities faced at this age, including bills, school costs and pension saving
  • ‘Age of responsibility’ lower in north (39) than south (47)

Age 44 is the point in our lives when we have the greatest number of financial responsibilities, according to a new study.

According to income protection specialists LV=, at 44 you’ll be typically juggling nine major financial responsibilities – varying from meeting mortgage payments to covering the costs of raising a family [1] to which LV=’s Cost of a Child report estimates parents devote nearly a third (29%) of their gross annual household income.

The study also showed when various financial responsibilities ‘peak’ across your life, including saving for a house deposit (age 25), paying for a wedding (30), kids’ schooling costs (39), paying kids’ university fees (47) and saving for retirement (52).

From the research it is clear that the North-South divide is alive and well with those living further up the country seeing their financial responsibilities peaking at a younger age. On average, people living in the south of the country saw their responsibilities peak at the age of 47 whereas, for their counterparts in the north, this happened eight years earlier. The main reasons for this are the fact that in the South and London people tend to marry and have children later in life [2] and that above the Watford Gap, property is comparatively cheaper meaning that people typically get on the housing ladder earlier [3].

Conversely even though many often see a significant fall in their income when they leave the workplace, typically, by this point many of the financial responsibilities of adulthood such as mortgage payments and childcare costs have evaporated. In fact, the findings show that for those entering the later years of their life their key responsibility is the costs of paying bills.

Myles Rix, Managing Director of Protection at LV= said: “It is clear that by our 40s, many will be relying on their income to achieve a multitude of things, including raising a family and all that this entails. However, whether someone has children or a mortgage or not, we would always encourage someone to put in place a financial back up plan, such as income protection, that ensures that they would be able to meet their financial commitments if they were to suddenly to lose their income due to accident or sickness.”

A life of responsibilities (when various financial responsibilities peak):

Age 25 – Saving for home deposit
Age 30 – Saving or paying for wedding
Age 32 – Childcare costs
Age 39 – Schooling costs (uniforms, trips, etc.)
Age 41 – Meeting rent or mortgage payments
Age 47 – Saving or paying for kids’ university fees
Age 52 – Saving for retirement
Age 61 – Paying for annual family holiday
Age 62 – Running / maintaining a car
Early retirement – Running the household
Late retirement – Paying bills

[1] The typical weight of financial responsibilities peaks at age 44. i.e. the age at which respondents were responsible for the greatest number of financial responsibilities.

[2] Halifax First Time Buyer Review (2015, p3) gives the age of the average first time buyer in London as 32, which is older than in other regions of the UK.

[3] Those questioned from the North East, North West or Yorkshire had a typical peak in responsibilities at age 39.4 vs those in the South East, South West or London whose peak occurs at 46.5.

Notes to Editors

The research was carried out by ICM Unlimited from 4-7 September 2015. The total sample size was 2,033 British adults over 18 years old and was conducted online. Results are weighted to be nationally representative.

Respondents were asked whether they were responsible or jointly responsible for any of 12 major categories of financial responsibility (1. Paying bills including council tax and utility bills 2. Running a household including upkeep and food 3. Running and maintaining a car 4. Meeting rent or mortgage payments 5. Budgeting and paying for an annual family holiday 6. Saving for retirement 7. Children’s schooling costs 8. Saving for a home deposit 9. Saving or paying for children’s university fees 10. Saving or paying for a wedding 11. Childcare fees 12. Care costs for elderly relative).

About LV=:

LV= employs over 6,000 people and serves over 5.7 million customers with a range of financial products. We are the UK’s largest friendly society and a leading financial mutual.

When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.

We offer our services direct to consumers, as well as through IFAs and brokers, and through strategic partnerships with organisations including ASDA and Nationwide Building Society.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.