Page 3 - FWP Wealth Adviser newsletter - June 2025: Issue112

ISSUE 112
MAY 2025

• The effect was strongest in financially secure households, Policy Implications and
suggesting that grandparental support provides the “ex- Wealth Management Strategies for Advisers
tra push” needed for families already considering more Philosophical and Practical Insights
children. The intersection of pension policy, family support, and
fertility raises profound questions about how societies
The study further highlights that the availability of balance economic resilience with demographic sustainabil-
grandparental support is not uniform. Maternal grandpar- ity. For financial advisers, this means adopting a holistic
ents, particularly grandmothers, tend to be the most active approach that considers not only individual wealth accu-
supporters, but grandfathers are increasingly important, mulation but also the broader context of intergenerational
especially as gender roles evolve1. The overlap between support and family wellbeing.
emotional support and practical childcare is significant:
“Grandparents who offer emotional support may signal to Actionable Advice for Advisers and Families:
parents that they are willing to provide child care or other • Plan for Intergenerational Support: Encourage clients to
forms of help as needed, such as financial assistance. In this consider how their retirement timing and financial deci-
case, the involvement of grandparents may represent a kind sions may affect their children’s ability to raise families.
of ‘insurance’ for parents concerned about whether they Where possible, structure wealth management strategies
have sufficient resources to support their children”. to allow for flexible retirement and the capacity to assist
In Australia, where formal childcare is expensive and with childcare.
often difficult to access, the withdrawal of grandparental • Explore Flexible Work Arrangements: Both older and
support due to delayed retirement can represent a substan- younger family members may benefit from part-time
tial barrier to family growth. As Have a Go News observes, work, job sharing, or phased retirement, enabling grand-
“If grandparents are not available to help, many parents may parents to remain engaged in the workforce while still
decide that having another child is simply too hard or too providing support to their families.
expensive”. • Leverage Superannuation and Pension Planning: Use
superannuation products and pension planning to build
International Perspectives in options for early or flexible retirement, recognising the
and Australian Realities value of grandparental involvement in family life.
Comparing Australia’s situation with European countries
provides valuable context. The Demographic Research study Policy Directions:
found that the positive association between grandparental • Integrate Family-Friendly Pension Reforms: Policymak-
support and fertility intentions was most pronounced ers should consider the broader social impact of pension
in France and Norway-countries with generous public age increases. Options include allowing more flexible
childcare and family benefits1. In contrast, Bulgaria and retirement for those with caregiving responsibilities or
Lithuania, with less public support and lower household providing tax incentives for grandparents who assist with
wealth, showed weaker or even negative associations. childcare.
This suggests that the impact of grandparental in- • Incentivise Grandparental Involvement: Recognise and
volvement is context-dependent. In environments where support the role of grandparents in family wellbeing
the state provides robust family support, grandparents through targeted subsidies, caregiver credits, or direct
supplement these services, enhancing family resilience and payments for informal childcare.
enabling higher fertility. Where public support is lacking, • Support Working Parents: Expand access to affordable,
families may be more reliant on grandparents, but if those high-quality childcare and parental leave, reducing the
grandparents are unavailable-due to work or health-fertility reliance on grandparents where necessary but also en-
intentions may stagnate or decline. abling intergenerational cooperation where possible.
Australia, with its high cost of childcare and patchy
support for working parents, appears closer to the latter Conclusion
scenario. As Firstlinks notes, “The intersection of pension Australia’s challenge is to design policies that support
policy, superannuation, and family support is becoming a both economic resilience and family growth. As the ev-
critical issue for wealth advisers and policymakers alike”. idence shows, grandparental involvement is a critical-if
The implication is clear: policies that extend working life often overlooked-factor in fertility decisions. Pension
for older Australians may inadvertently undermine the very reforms that delay retirement may inadvertently reduce the
demographic sustainability they seek to protect by discour- availability of this support, contributing to lower birth rates
aging family growth. and a less resilient society. For wealth advisers, families,

3