39% of retirees spend £3k a year supporting family

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On average, the study found, retirees that support family members give £3,000 a year, almost always to help with everyday living costs like food shopping, energy bills and day to day travel.

Half of those receiving support from those about to get their pension are over 25, Prudential said.

The Institute for Fiscal Studies (IFS) has previously found that the average older household spends 4% of its disposable income on transfers to people outside the household.

Risking financial well-being

Prudential say that older people could be putting their own financial well-being at risk by supporting family members.

"Many retirees will still be feeling the pinch when they first stop working," said Stan Russell, a retirement income expert with the insurer, "people retiring this year are risking their own standard of living with the levels of support they provide."

It may be true that some people entering retirement are coming under greater financial strain as a result of family commitments.

Research released last year by Aviva found that 40% of pensioners surveyed said they were cutting back in order to support family or save for an inheritance.

For example, 10% said they would take fewer or no holidays, 11% planned to find part time work and 12% were planning on downsizing their home in order to better save for family.

We also know that older people are more likely to be in debt than they used to be: one in four people over have outstanding debt, aside from a mortgage, and they owe £4,500 on average, according to the Wealth and Assets Survey.

All in all, it looks as though older households are facing more financial pressure than ever.

Support coming from the richest

However, it's worth bearing in mind that Prudential's £250 a month average spend is likely skewed by the richest households.

If we look at statistics from the IFS English Longitudinal Study of Ageing (ELSA), a big study of spending patterns, we can see that transfers (shown in black) do make up a big proportion of spending even among the older households, which tend to spend less in general.

SOURCE: The English Longitudinal Study of Ageing (ELSA) 2006 wave, available here [pdf].

But those results come from large transfers from some of the wealthiest households, which transfer out about 7% of their disposable income.

As we can see below, the poorest households do often make transfers but they're giving away a smaller percentage of their disposable incomes.

Those in the poorest wealth quintile transfer £36 a month on average, while the oldest and wealthiest group give £132 on average.

SOURCE: The English Longitudinal Study of Ageing (ELSA) 2006 wave, available here [pdf].

Leaving aside the fact that neither figure is close to the £250 a month average Prudential found, it's clear that, although they are likely to under strain elsewhere especially as living costs continue to rise, in general poorer households don't seem to be over burdening themselves by giving money to family.

Spending overtaking inheritance?

It's also worth bearing in mind that increased day to day support could also simply show that retirees are becoming less concerned with a leaving a large inheritance, perhaps preferring to help their children or other family members with life events like buying a house or having children.

24% of respondents to the Prudential survey said they didn't expect to leave an inheritance.

The Aviva report from last year mentioned above also found that a quarter of over 75s and around a fifth of over 55s have given a cash loan to family members specifically instead of leaving an inheritance.