The financial squeeze facing the sandwich generation – and how to stay afloat

A lot of people anticipate that once they reach middle age, after dedicating years to their careers and families, they’ll have more freedom and resources to pursue their personal goals.

More and more people are now caring for both their children and their elderly parents, which creates significant financial and emotional strain.

Many adults, often those from Generation X (born between 1965 and 1980), find themselves caught between caring for their aging parents and supporting their grown children. They’re typically helping with their parents’ expenses and daily needs, while also providing financial help to their children, who are staying dependent for a longer period than in the past. This group is often called the ‘sandwich generation‘ because they feel squeezed between these two responsibilities.

The problem

More and more young adults are staying at home with their parents into their 20s and 30s because it’s difficult to find jobs and affordable places to live. With rents and house prices going up, and the general cost of living increasing, parents are often still providing financial support to their adult children. Recent data from the Office for National Statistics (ONS) shows that in 2025, 35% of men between 20 and 34 were living with their parents, compared to 22% of women in the same age group.

People are living longer lives, which means older parents may need support – like help with money, daily tasks, or managing their finances – for an extended period. Current estimates suggest women will live around 84 years and men around 80 years.

Supporting both children and aging parents financially can make it difficult to save for the future, like retirement. A recent study showed that people in Generation X are particularly likely to fall short of their retirement savings goals.

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This generation is squeezed financially because they’re often responsible for supporting both their children and their aging parents. On top of that, many didn’t have access to the good, guaranteed pensions of the past, and they haven’t had enough time to build up significant savings through the newer automatic workplace pension scheme that started in 2012.

Rebecca Williams, a financial planning expert at Rathbones, notes that many people in Generation X are approaching retirement without enough savings compared to their parents. This is because they entered the workforce as traditional, guaranteed pensions were becoming rare, and they’ve since dealt with slow wage increases and several economic setbacks, making it difficult to save consistently for the future.

Many people in this group are part of the ‘sandwich generation’ – they’re caught between supporting their own children and their aging parents. This makes it challenging to save for retirement, especially with everyday expenses already being a strain.

PensionBee’s research shows people over 50 often haven’t saved enough for retirement. On average, women in this age group have around £30,644 saved, while men have about £54,512 – a significant difference.

Make sure you protect your retirement savings.

What you can do

Seek financial support

I recently learned about potential financial help for caregivers, and I wanted to share it. If you’re dedicating at least 35 hours a week to caring for someone else, you might qualify for Carer’s Allowance. Right now, it’s worth £86.45 each week, which could really make a difference!

Having savings won’t disqualify you, but your income could be a factor. It’s also a good idea to make sure the person you’re caring for is getting all the financial help they’re eligible for, like Attendance Allowance or Pension Credit.

Protect your retirement savings

It’s understandable to want to help family financially, and you might consider lowering your pension payments or using your savings. But remember, cutting back on your pension means less money for your future, and you could lose out on contributions from your employer as well as potential investment gains over time.

Discuss lasting power of attorney

It’s crucial to discuss lasting power of attorney (LPA) with aging parents. This legal document allows them to appoint someone they trust to make decisions on their behalf if they lose the ability to do so themselves.

A Lasting Power of Attorney (LPA) lets you choose people you trust to make important decisions for you if you were to lose the ability to make them yourself. There are two main types: one for managing your money and property, and another for healthcare and personal wellbeing.

Setting up a Lasting Power of Attorney (LPA) doesn’t take away your parent’s independence. It simply ensures that if they ever become unable to make decisions for themselves, the people they choose can step in and handle things quickly, without needing to go through a long legal process.

Make time for yourself

It’s common for people who are caring for both children and older family members to neglect their own needs.

Make time for things you enjoy, like exercise, spending time with friends, volunteering, or hobbies. Even just a few hours each week dedicated to these activities can lower stress and help you avoid burnout, especially when you have a lot of responsibilities.

Caring for parents and children: Your essential checklist

Check whether you’re entitled to Carer’s Allowance or other financial support
Make sure elderly relatives are claiming all the benefits they’re eligible for
Continue pension contributions wherever possible and avoid raiding retirement savings
Have conversations about lasting power of attorney before a crisis occurs
Create a household budget to understand where money is going
Talk openly with adult children about financial expectations and future independence
Seek professional financial advice if you’re struggling to balance competing priorities
Make sure you dedicate regular time for your own health and wellbeing

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Authors

Melanie Wright

2026-06-05 16:07