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LV= Insights

Sandwich Generation

28 November 2018

The second instalment of a report by LV= titled ‘Income Roulette’, based on research conducted with over 8,500 people, reveals that many of the Sandwich Generation in the UK have huge financial obligations as well as being extremely worried about what could be around the corner.

  1. Nearly 3 in 5 (57%) of the Sandwich Generation fall short of the Money Advice Service (MAS) recommended amount of savings to be financially resilient.
  2. As the Sandwich Generation begins to age, it is expected that their financial situations will intensify.
3 out of 5 Sandwich Generation fall short of financial resilience recommendations
The UK Sandwich Generation

Made up of approximately 2.4 million people, the UK Sandwich Generation are people in their 40s to 50s. They tend to have one or more children and also consider themselves as a carer to an older relative, or even a friend. They’re finances are spread thinly and are constantly strained by unexpected expenses; they also carry the burden of worry about what lies around the corner.

Barriers to saving

Looking after one child or more, they say their children are a constant source of unexpected expenses. Therefore, they have a lower capacity to save with 37% with less than £125 in disposable income each month.

More than half (54%) say they would like to save but cannot afford to do so – which may also mean they struggle to top up their pension pots.

On average this squeezed group has around £60,000 to retire on, while expecting these savings to last around 20 years. It may surprise them to realise that this leaves the average retiree with a monthly income of about £250.

37% have less than £125 in disposable income each month

What's next?

To help strengthen their financial resilience, we believe there are areas that could be addressed.

A mid-life MOT should be delivered through the workplace to give people a rounded view of their finances and help build confidence around money and savings.

It is clear this generation feel they are being pulled in many directions, with pressures to care for older relatives and on-going responsibilities for their children. The Sandwich Generation have huge financial obligations and with the rising cost of living, are worrying more about what could be around the corner. Spreading their finances too thinly and dwelling on their worries, means the impact of having little or no plans in place, could expose them to a real income shock.

Justin Harper Head of Marketing LV=
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Products to consider

Income Protection

We believe everyone should be supported if they are ill and unable to work, with quality financial protection that pays out when it matters. Our Income Protection cover pays an on-going, regular benefit for up to 60% of your client's income, helping minimise the cost and impact ill-health can have on clients (and their families).

The Sandwich Generation spans across 2.4 million people so it is likely that some of your clients in this segment fall into this category. It is especially important that they safeguard their income as if they're ill and out of work, they’re not likely to get paid, leaving them with only their savings to rely on.

Find out more about Income Protection

Pension Planning

Consolidating multiple pension pots makes total sense for your clients that fall into the Sandwich Generation as it helps them to understand their retirement situation. Unfortunately the process isn’t always straightforward which is why your advice is really important to support this group of clients.

Tools to help you with clients

We have a range of tools to help you help your Sandwich Generation clients throughout their protection and retirement journeys to help safeguard their lifestyle now and looking ahead, to their financial future.

LV= Risk Reality Calculator

To help you and your clients understand the chances of being out of work or suffering a serious illness, we’ve created a handy online tool.

Estimate from CarersUK

Methodology for recognised benchmark of financial resilience: Money Advice Service (MAS) guidelines for financial resilience state that ‘people should hold an emergency fund of three months’ income’. LV= identified the ‘least financially resilient’ groups based on the combined factors of how respondents fared against the MAS definition and how confident respondents reported to feel about being able to manage a financial crisis.

Methodology for consumer survey: YouGov, on behalf of LV=, conducted online interviews with 8,529 UK adults between 20th and 26th June 2018. Data has been weighted to reflect a nationally representative audience.

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Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237. County Gates, Bournemouth, BH1 2NF, UK