As UK children prepare to head back to school, a new survey from PensionBee, a leader in the consumer retirement market, reveals the stark financial trade-offs parents are being forced to make – with saving for retirement often one of the first casualties.
The research, conducted among 1,000 UK representative parents, found that back-to-school expenses can be a major drag on long-term financial security.
Almost three-quarters of parents (74%) said these costs put either some or a great deal of pressure on their ability to save for the future, including into a pension or ISA.
Around 20% said it added a little pressure, while only 7% said the annual expense of uniforms, stationery and other essentials created no pressure at all, highlighting how the cost of living crisis has affected people and just how widespread the impact is on family finances.
Immediate needs trump pensions
When asked where they would cut back as disposable income shrinks, parents made it clear that long-term savings take a back seat. Over half (52%) said they would prioritise their children’s education and activities, followed by a quarter (25%) who would put money into short-term savings such as a holiday or rainy day fund. 12% said they would prioritise paying off debts and loans.
Just 11% said they would prioritise long-term savings like a pension or ISA – putting retirement firmly at the bottom of the list.
Contributions at risk
The research also revealed the extent to which parents’ pensions are vulnerable during high-spend times of the year.
A majority (59%) admitted they are very likely or somewhat likely to reduce or pause their contributions during expensive periods such as September’s back-to-school season, or Christmas.
Around 35% said they were not very likely or not at all likely to do so, while 5% reported not contributing to a pension at all.
Confidence gap
This financial pressure is leaving many parents uncertain about their future.
Just 14% said they felt very confident about balancing family expenses with saving enough for retirement, while nearly a third (30%) described themselves as unconfident.
A quarter of parents (25%) sat on the fence, admitting they felt neither confident nor unconfident, pointing to a lack of clarity and optimism about their long-term financial outlook.
Spare cash prioritised for today, not tomorrow
The research, conducted among 1,000 UK representative parents, found that if families had an extra £100 each month after paying school-related costs, almost a quarter (24%) would direct it towards short-term savings for holidays or a rainy-day fund while a fifth (20%) said it would go towards everyday household spending.
Around 17% said they would put the spare money towards family leisure time, while 15% said they would set it aside for their children’s further education fund and 11% said it would go towards paying off debts or loans.
Only 14% of parents said they would allocate the money to long-term savings such as a pension or ISA, highlighting how immediate needs are consistently crowding out long-term financial and retirement planning.
This short-term focus is being driven by mounting financial pressure, as parents try to strike a balance between supporting their children’s immediate needs and planning for their own financial futures.
Lisa Picardo, Chief Business Officer UK at PensionBee, said:
“It’s clear that many parents are being forced to put their own financial futures on hold or at risk to cover everyday living expenses, and the burden of back-to-school costs.
While supporting children’s needs is understandably a priority, parents need to keep a careful eye on long-term savings and retirement planning.
Even small contributions to pensions can make a real difference over time, yet our research shows these are often the first things to be reduced or paused.
Finding ways to balance immediate pressures with future planning is essential, so parents can provide for their families today without compromising their security tomorrow.”
