There has long been a tradition of children being supported by their parents, with financial help from the ‘Bank of Mum and Dad.’
Recent research shows however that this trend is set not only to stop, but to go into reverse. 55% of all age groups of adults with living parents are either supporting or expecting to support their parents financially in their retirement.
Indeed, 37% of people say the last time they turned to the ‘Bank of Mum and Dad’ was when they were in their twenties, and 34% express concerns that their parents won’t have enough money to get by comfortably in retirement.
As final salary pensions are dwindling and life expectancy increases generation by generation, there is less money available that needs to last much longer.
And adult social care plays a big part in considerations for the financials of later life.
There continues to be a lot of talk about the Autumn Budget Statement however it is very welcome news for carers concerning the uplift in the earnings cap for Carers Allowance – the first increase since 1976 – from £151 p/w to £196 p/w from April 2025
The adult social care sector continues to require needs clarity on the allocation of the announced £600 million local authority grant as this is worth only about 1.5% of the £38.6bn councils have budgeted to spend on adults’ and children’s social care in 2024-25
So seems like there is much more to do and in spite of the announcement confirming that the National Living Wage would rise by 6.7% in April 2025, to £12.21 per hour benefiting many thousands of care workers it seems like a missed opportunity for big reform.
Changes to Employer National Insurance Contributions announced last month look set to cost the adult social care sector over £900m next year, more than wiping out the extra funds allocated to social care at the recent Budget, new analysis reveals today.
Taken together with the planned increases to National Minimum Wage rates, the Nuffield Trust says that the 18,000 independent organisations providing adult social care in England will be faced with increased costs of an estimated £2.8bn in the next financial year. This will mean that many businesses – especially smaller ones – are at risk of going bust, disrupting or ending vital care for thousands of older and disabled people.
The Nuffield Trust says these combined cost pressures outstrip not only the extra funds for children’s and adult social care announced in the Budget but will also eat up the extra spending power local councils are expected to have because of Budget-driven increases for other services and the likely hikes they will make to council taxes. If councils are unable to pay social care providers higher fees, the vast majority of small providers who cannot absorb these extra costs will have to increase prices for people who pay for their own care, stop accepting council-funded people, or go out of business altogether.