India's New Generation-Sandwithched between "Baap" and "Beta"

The squeeze is on for Asian families struggling to provide

for children and elderly parents

As people in Asia live longer and women have children later in life, a rising number of adults are simultaneously caring for young children and ageing parents—a phenomenon long recognised in other parts of the world as the growth of the ‘Sandwich Generation’. New research by the Economist Intelligence Unit and sponsored by Fidelity International—Feeling the squeeze: Asia’s Sandwich Generation—shows one in five working-age Asians is now a member of this cohort. These people are typically aged 30 to 45, married, and supporting one or two children and two parents or parents-in-law. The size of the Sandwich Generation varies considerably across regions: in China 37% of the working-age population is supporting multiple generations; in Australia and Japan, only 6% is in this position. Across the region, many members of the Sandwich Generation are squeezed by the financial burden of caring for multiple generations and are concerned that their future living standards will decline.

These findings are among the results of a survey of 700 people in Australia, China, Hong Kong, Japan, Singapore, South Korea and Taiwan who are currently supporting both their children and their parents. The aim of the survey, which was conducted by the Economist Intelligence Unit in March and April 2010, was to ascertain how the burden of supporting parents and children affects the decisions of working-age adults in relation to their disposable income and investment/saving behaviour.

The other key findings of the report are as follows:

• Asia’s Sandwich Generation is saving for retirement, but many anticipate a reduced standard of living. For the most part, members of Asia’s Sandwich Generation are contributing to public and private pensions or insurance policies, but 42% expect their standard of living to fall once they leave the work force. South Korean and Japanese Sandwich Generation members display the highest level of anxiety about their retirement years. Regardless of their projections for the future, few Asian Sandwich Generation members (just 16%) seek professional advice in financial planning.

• The Sandwich Generation is working harder, saving less and taking fewer risks with their investments. More than one-third of Asia’s Sandwich Generation members have had to work harder to cover family expenses since becoming “sandwiched”; about half have reduced their savings and investments, and nearly two-thirds are more cautious with their existing investments than they would otherwise be.

• Many are struggling under the pressure. More than one-third, 36%, of Sandwich Generation members say they are “struggling to cope” with the competing demands of their parents and children. Those in Hong Kong are feeling the most pressure, with 53% of respondents reporting they are struggling to cope.

• The pressures of supporting parents and children have grown, but dedication to ageing parents remains strong. As longevity has risen and women are having children later, families are simultaneously caring for young children and ageing parents more than in the past. But although the demands may have increased, the Asian Sandwich Generation’s sense of filial obligation remains strong, with 78% agreeing that it is their responsibility to help their ageing parents.

• Education is a major expense for the Sandwich Generation, but they are willing to pay handsomely for the investment in their children’s future. Asian Sandwich Generation members spend more time and money caring for children than parents, and their children’s education is the primary concern. Educational expenses, which can be considerable, start as early as primary school. Many expect to continue paying for their children into early adulthood: some 58% regionally (and 73% of Sandwich Generation members in Taiwan) say they expect to care for their children into their 20s.

• Caring for parents can also be expensive, especially where the social safety net is weak. In regions where the elderly often lack pensions or access to public healthcare services, the burden is heavier than elsewhere on Sandwich Generation members to cover their parents’ costs. Sandwich Generation members in China and Hong Kong spend more on their parents than their Asian peers, a result in part of weak social security systems that provide little support for retirees or their families.

Posted by Vidyanand Acharya
Courtsey-EIU Research