Families are ignoring the inevitable by not discussing future financial issues - such as how parents plan to fund their retirement and who will manage family affairs once they become incapacitated by age or have died.
Families are ignoring the inevitable by not discussing future financial issues - such as how parents plan to fund their retirement and who will manage family affairs once they become incapacitated by age or have died.
A study in the UK, commissioned by Norwich Union UK, showed that only 14 per cent of older parents have discussed financial concerns with their grown up children. Yet, a staggering 90 per cent of older parents felt it was their responsibility to raise the topic with their family members. Opinions of adult children varied with just over half of respondents saying they should be the ones to raise the issue .
“British and Australian cultures have a number of similarities in my opinion - the people in this country are very likely to be facing the same issues,” said Allan Griffiths, Managing Director Norwich Union Life Australia Limited.
“Unlike many other countries, where it is common practice to have older parents ‘looked after’ by their adult children, Australian - and presumably British - culture has moved towards self-reliance based on increased affluence," he said.
According to the Australian Bureau of Statistics, in 1998 12 per cent of the population was aged 65 years or over. Average life expectancies have also increased, with women expecting to live until 86 years while men are looking at 81 years .
These two issues mean the pension system won’t be able to fund retirement for the entire population. This is a concern for every Australian.
“Younger Australians are also much more financially literate than their parents, having grown up in the superannuation age and are well placed to discuss important money issues. Most will understand the importance of sending their parents to an Independent Financial Adviser.”
“Gone are the days when people could rely on the pension to see them through retirement and live out their days in a granny flat in the backyard of their children’s home,” said Allan.
“People are now looking forward to enjoying their retirement and their new lifestyle. However, it’s important they plan ahead and the first step for many will be talking to their family members and ensuring that everyone understands their future plans.”
According to the Norwich Union UK report, many families aren’t comfortable discussing their financial issues as they consider them confidential and personal.
“It’s like that old saying ‘a problem shared is a problem halved’. By talking about financial issues individual family members can stop worrying on their own. I recommend involving the whole family when choosing an Independent Financial Adviser. “
“The first step to taking stock of your financial situation is to begin working with an Independent Financial Adviser. This is an important choice and it really is a good idea to consider your whole family, because in the long run your Financial Adviser is likely to end up working with a number of different members of the family,” said Allan.
“But don’t ever think it is ‘too late’ to see an Independent Financial Adviser. These experts can design strategies which maximise social security entitlements as well as create plans to grow wealth for the short to medium term."
Allan Griffiths is available for interview on 0419 307 319.
For further information, please contact:
Simon Morgan
Group General Manager Public Affairs
(03) 9829 8892
0407 966 632
Notes to editors:
- Norwich Union Australia is a group of three specialist financial services companies; Navigator, Norwich Union Life and Portfolio Partners. Through these companies we provide products and services in the areas of wealth creation, wealth management and wealth protection for more than 300,000 customers throughout Australia.
- Globally, Norwich Union Australia is part of Aviva plc, the world’s seventh largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
- Aviva’s principal business activities are long-term savings, funds management and general insurance. It has a market capitalisation of approximately A$32.19 billion at 30/09/02, worldwide premium and investment sales of more than A$80 billion from ongoing business and more than A$572 billion in assets under management. The group has 64,000 employees and more than 25 million customers.