Fewer Gen Ys expect their Baby Boomer parents to help them out with the purchase of their first home this year than in 2011. According to the latest RaboDirect National Savings and Debt Barometer, 64 per cent of Gen Ys don’t expect to need help from their parents, compared with 47 per cent last year.
The findings suggest that more Gen Ys are feeling more independent from their parents – possibly helped along by a softer housing market. However, for many Baby Boomers, it’s a very different story, with some unable to give their children financial help even if they want to. Key findings in this regard include:
- Almost 53 per cent said they would like to help their kids, however just under 20 per cent expect to be able to.
- Some 30 per cent expect to retire still encumbered with a mortgage.
- Forty-one per cent of those retiring with a mortgage expect to repay it only by selling their property.
According to Renee Amor, spokesperson for RaboDirect, the softer housing market also sounds a warning for Boomers relying on the property market to fund their retirement.
“It has been traditional in this country to expect to retire with the family home paid off and increasing in value. It’s been seen as the ultimate safety net and often used to help younger family members get their start in the property market as well as funding retirement lifestyles,” she said.
“Our survey findings directly contradict this expectation and are of real concern in an environment where housing values are slipping and our population is ageing.”
Ms Amor said, however, that it’s never too late to counter these trends.
“Act now, regardless of your age. Even small steps and changes in budgeting, savings and spending behaviour can help build a bigger nest egg to maintain your lifestyle in retirement. One way to make an immediate positive difference is to use a genuine high interest savings account and Term Deposits. That way you can ensure that any funds you do have to hand are working for you 24/7, rather than wasting away in low- or no-interest transaction-style accounts which are often – misleadingly in our view – labelled as ‘savings accounts’,” Ms Amor said.
3 July 2012