If you feel as though your finances are under pressure as you support both children and elderly parents, you’re likely to be part of the ‘Sandwich Generation’. Research has found that many of those aged between 40 and 60 are struggling with financial responsibilities.

Despite being caught in the middle of two types of dependents, many in the Sandwich Generation aren’t financially prepared, according to a survey from LV=.

Among those dubbed the Sandwich Generation:

• 52% are worried about the consequences of a serious illness affecting themselves or their partner
• 30% are worried about the prospect of themselves or their partner dying and leaving the family without an income
• 54% want to save but can’t afford to
• 37% have less than £125 disposable income each month
• 46% cite children as a constant source of unexpected expenses

While working to support families, the Sandwich Generation is neglecting their own long-term financial security. On average those within this group have a pension valued at £60,000 that they expect to last 20 years. It’s an amount that is likely to result in an income of less than £260 a month, according to LV=. Even when the full State Pension is added, assuming you qualify, at £164.35 per week, many are facing a retirement struggling financially.

Justin Harper, Head of Marketing at LV=, said: “It’s clear this group feel they are being pulled in many directions, with pressures to care for older relatives and ongoing responsibilities for their children. The Sandwich Generation have huge financial obligations and with the rising cost of living, are worrying about what could be around the corner. Spreading finances too thinly and dwelling on their worries, means the impact of having little to no plans in place, could expose them to a real income shock.”

Five tips if you’re part of the Sandwich Generation

With different priorities pulling at your finances, it can be challenging to manage daily expenses alongside building security. These five tips can help get you on the right track:

1. Create a realistic budget

Setting out a monthly budget that covers everything, from utility bills to savings, can help you find the areas to cut back on.

You probably already have some sort of budget, even if it’s just in your head. But writing it down and keeping track of what you’re spending makes it far easier to stick to. If you find you’re regularly going over what you set aside to spend or undersaving, you may need to revisit what’s realistic.

Of course, there are times when unexpected bills crop up. Leaving a portion of your income to act as a buffer in these events can help.

2. Build up an emergency fund

The Money Advice Service (MAS) recommends having a safety net of at least three months’ salary to fall back on. However, 57% of the Sandwich Generation don’t have this amount, the research found. As a result, 34% don’t feel they could handle a personal financial crisis.

If you’re among those that don’t have an emergency fund, now is the time to build one up. Looking at the end figure can seem daunting. Instead, focus on putting away a small portion of your wage every month as soon as you’re paid. Breaking it down into smaller chunks can make creating a financial safety net more manageable.

When your finances are really under pressure, even putting away small sums can seem impossible. But making it part of your monthly budget can mean you feel far less apprehensive about the future.

3. Consider protection

If you’re one of those that are worried about how your family would cope should something happen to your income, some form of protection can give you peace of mind.

Income Protection that will pay out monthly in the event of illness or injury, for example, can ensure both you and your loved ones have a safeguard in place. There are other options too, such as Critical Illness Cover and Life Insurance. Which one is right for you will depend on your situation and what you’re concerned about.

When your finances are already stretched, it can seem like an unnecessary expense. However, consider the financial consequences of not having any cover should illness, injury or death strike.

4. Don’t neglect your own financial future

With a focus on providing for ageing relatives and children, the research suggests the Sandwich Generation are doing so at their own expense. Don’t forget to take steps to secure your own financial future too.

One of the key steps to take here is to save into a pension. If you’re working full-time, you’ve probably been automatically enrolled into a Workplace Pension in the last couple of years. While you can opt out of this, it’s short-sighted.

5. Talk to a finance professional

There’s a common misconception that financial advice is only for the wealthy. The truth is that it can help you to get the most out of your money. Seeking the advice of a financial adviser or planner can help you balance the needs of today with those in the future.

By better understanding how your money choices will affect your financial security immediately and in the future, you’ll be in a better position after speaking to a professional. Contact us today to get the process started.