Australian grandparents and parents have become increasingly worried for the next generation’s financial security and may need to turn to investments to financially support them, according to Generation Life’s joint chief executive and managing director, Catherine van der Veen.
Generation Life’s Saving for the Next Generation report, which surveyed over 1,000 grandparents and parents, found that over half of respondents worry their grandchildren and children won’t be able to afford to buy a property or live comfortably when they reach adulthood.
The survey also found 26 per cent of parents were concerned a good education is unaffordable for their children, a fear which is shared by 22 per cent of grandparents.
Despite fears, though, more than half of parents (53 per cent) were not currently saving to support their children financially and two thirds wished they had started around 10 years earlier.
Van der Veen said while parents were prioritising saving for their children’s school and university fees, research showed many were not using the more effective strategy to achieve that goal, with the survey showing 48 per cent of grandparents and 59 per cent of parents favoured cash and term deposits to save.
Joint chief executive and managing director, Lucy Foster, said this was an ineffective way of trying to reach their long-term financial goals, and, despite their relative anonymity, investment bonds could perhaps be a better option.
“They can be the most tax effective and controllable investment after super, as you can access your money at any stage,” she said. “There seems to be a misconception that investment bonds aren’t an affordable option, but we’re finding as people learn about the benefits, they are growing in popularity.”