The 'sandwich generation' feels the squeeze
Half of the members of the ‘sandwich generation’ in Asian countries including Australia have reduced their savings and investments due to financial pressures, according to the latest research commissioned by Fidelity International and conducted by The Economist Intelligence Unit.
The sandwich generation consists of working adults who support their children as well as their parents at the same time, and now make up one fifth of Asia’s working-age population.
Managing director of Fidelity International, Gerard Doherty, said although there has been a reduction in investments within this group, there is still a need to focus on saving, investing and seeking expert professional advice to investigate strategies that can support three generations.
“The need to provide for parents and children as well as themselves means this generation is cautious with their investments and pessimistic about how they will be able to maintain their current standard of living into retirement,” he added.
Within Asia, the group is biggest in China and smallest in Australia, where it accounts for over one million people or 6 per cent of the working-age population. Doherty said this number is expected to grow as children stay at home longer.
He also noted the top saving option for the sandwich generation in Australia is bank deposits, while only 9 per cent directly invest in the stock market, the lowest ranking in the region.
Looking ahead, Doherty said many parts of Asia and Australia will undergo a significant demographic transition in the coming years.
“At the same time, the size of the average family in the region has become smaller. In the future, people will have fewer siblings to share the cost of caring for elderly parents, so the demands are likely to be more significant than for today’s sandwich generation,” he said.
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