Many people are starting their families later on in life, for all sorts of reasons – whether it’s related to money, careers, relationships or health and fertility.
Older parents may find some financial advantages to having children a little further along. They may have climbed higher up the property ladder, and be more established in their career.
But there could also be extra hurdles facing this so-called sandwich generation, perhaps even juggling looking after their own, ageing parents with the very different demands of caring for a young family.
Here, Sarah Coles, of Hargreaves Lansdown, outlines 10 financial considerations if you’re having a baby later in life…
Take care over extra borrowing
For older parents, a bigger mortgage may mean carrying debt into their 70s, or the risk of approaching retirement with non-mortgage debts left to repay, both of which could have a big impact on their disposable income in retirement.
Remember your pension
The “empty nest” period will come later in life, giving you less of an opportunity to focus on building retirement savings. It means you may need to keep up consistent pension payments for as many of your years as parents as you can – and prioritise it above non-essential spending.
Consider university costs
If your child is heading to uni at the time you plan to retire, you could consider setting aside funds to cover the costs in advance. One option is to put money aside in a Junior Isa, which will ensure the money is tucked away tax-free until your son or daughter is 18. You can contribute up to £4,368 a year into a Jisa.
Talk to your own parents
It’s worth knowing in advance the provisions your parents have made in case they need care as they get older, and the part they expect you to play.
If you have young children and parents with care needs at the same time, find out about resources available to help.
Have a childcare “plan B”
Some grandparents are keen to pitch in with childcare into their 80s, but some will feel their childcare days are behind them. Others may find their health isn’t good enough for them to help. It’s better to put a plan in place early and try to find affordable care.
Plan for the worst-case scenario
This is vital for parents at any age. Life insurance can help protect children if parents were to die, and critical illness cover and income protection provide support if parents suffer an illness or injury. You may want to have details of who would take care of your children included in will planning.
Take account of tax charges
Older parents may be closer to their peak earning potential, and one parent may earn more than £50,000 – the point at which some child benefit may need to be repaid. You can choose not to apply for child benefit, but if one of you isn’t working, ensure you’ll still receive national insurance credits towards your state pension by completing a form.
Talk to your employer
If you’re at management level, you may be setting a precedent by asking to work shorter or more flexible days. Build solutions sooner rather than later.
Factor in additional expenses
Depending on the circumstances, if fertility treatments are needed they can be costly, so consider the implications.
Plans for future property dreams
For older parents, remortgaging to help children on to the property ladder may not be practical. Over-55s may be able to dip into their pension pot, but this will have implications for their income for the rest of their life. If you expect to help your child on to the property ladder, it’s worth planning how to achieve this without making painful sacrifices further down the line.