IFEC survey reveals that Hong Kong's "sandwich generation" perceive themselves to have more financial stress than the previous generation

26 June 2019

  • About 71% of the respondents said they feel financially stressed. Three in four claimed to be more stressed with money matters compared with their parents' generation.
  • Major causes of stress included children's education (55%), household expenses (48%) and making provision for their retirement (34%).
  • Parents were also willing to support their adult children in the future: 74% will help with home purchase; 57% will help with wedding expenses.

The Money Matters of the Sandwich Generation1 survey conducted by the Investor and Financial Education Council (IFEC) has shown that a significant number (75%) of Hong Kong parents claimed to be more stressed with money matters compared with their parents' generation.

In May, the IFEC conducted an online survey with 400 Hong Kong adults with primary school-going children to gather insights into their financial commitments and obligations, and how they impart financial knowledge to their children. According to the findings, 71% of the respondents said they feel financially stressed, while the younger parents born in the 1980s (75%) feel more stressed than the older age groups.

The top three sources of financial stress cited are children's education (55%), household expenses (48%) and making provision for retirement (34%). Apart from education expenses, extra-curricular activities, entertainment and travel expenses for the children also take up a good sum of money every month, which on average amounts to some 9% of the monthly household income. The surveyed parents spend an average of HK$3,210 per month on extra-curricular activities for their children.

Other than expenses for themselves and the children, 83% of the respondents felt they have a responsibility to provide financial support to their retired parents. Over half (53%) give between HK$3,000 and HK$7,000 a month to their parents, another 18% provide their parents with an allowance of between HK$7,000 and HK$11,000 a month.

Ambivalent attitude: how financially independent should my children be?

While the respondents expect their children upon reaching adulthood to be financially independent, they are also not opposed to helping them out.

In the survey, 79% said that they will not provide financial support to their grown-up children once they have finished school and entered the workforce. Another 87% said they expect their grown-up children to contribute to household expenses. However, 74% of the parents said they would provide financial support for their children to purchase a home, and 57% would contribute to their son or daughter's wedding expenses. Some 45% indicated that they would be willing to help with their children's credit card debts if necessary.

Mr David Kneebone, General Manager of the IFEC said, "It is every parent's wish for their children to have a better future than themselves, and therefore not unusual for well-meaning parents to provide financial support to their children right through their adult years. Nevertheless, parents should also consider their own future and retirement needs."

“While generational wealth is something that we aspire to pass on, financial legacy can come in various forms such as financial knowledge, skills and values which goes beyond monetary assets to guide our next generation to become better at making money-related decisions.”

Financial legacy: Grandparents' influence on the next generation

In terms of values and financial lessons learnt, 72% of the surveyed parents consider their parents a good role model in money management, citing their ability to budget (65%), good savings habit (60%) and prudent spending habit (58%).

The survey also found that grandparents play a significant role in their grandchildren's money education, and 64% of parents perceived the grandparents to be a source of positive influence on the grandchildren.

However, 45% of the respondents claimed to encounter conflicts with grandparents on how to teach children about money matters. For example, some noted that grandparents may indulge their grandchildren with toys, presents and pocket money, thus making it hard for parents to teach their children the value of money.

"We see the importance of getting all family members on board when it comes to money management. Parents and grandparents are encouraged to discuss and exchange views on financial education for the children with their interests at heart," Mr Kneebone said. "We are committed to working with families to teach our next generation to make wise and informed decisions regarding their finances."

Upcoming Chin Family event: Good Old Times (2019) (29 June – 9 July)

The IFEC will be organising the upcoming Good Old Times, a money learning event through role-play for children between the ages of four and ten years old. Good Old Times will be held at Plaza Hollywood, Diamond Hill from 29 June to 9 July.

Children can pick up basic money concepts through assigned tasks in a traditional setting featuring nostalgic old Hong Kong stores. To emphasise the importance of passing on good money values between the younger and older generations, the 3A (Third Age) Financial Literacy Ambassadors will share their knowledge and run a quiz to test the children on money matters and traditions of the past. This free event will comprise of learning activities for children, educational resources for parents and grandparents, plus performances for all.

1The Sandwich Generation is a generation of people who have to take care of both parents and children.

Photo and caption:

1. (From left to right) Mr Lester Huang, IFEC Chairman and Mr David Kneebone, IFEC General Manager shared the findings on the Money Matters of the Sandwich Generation survey.