Insurer LV= has identified “Peter Pan syndrome” sweeping the nation, with 16 million Brits delaying at least one major life stage until they are older.
The timing of marriage, having a baby or buying a home has been pushed back over the last few decades, with trends suggesting these life events will occur even later in life in the future.
By 2025, the average age of a first time home buyer is forecast to be 41 years old. The average age of first time mothers is likely to hit 29 and the average age for getting married will be 34 for women.
At the moment, the average age for tying the knot is 32 for men and 30 for women. Back in 1970, men typically got married at 24 and women at 22.
The average age for starting a family today is 28 for women, up from 24 in 1970.
In the 1980s the typical first time buyer was 29 years old. Today they are 38 years old, and with the average mortgage term of 25 years this means many people will be repaying their mortgages right up until they hope to retire.
Buying a house, getting married and starting a family are all expensive life events. They all require a high level of financial commitment which often results in other financial objectives becoming a lower priority.
One consequence of this Peter Pan syndrome is the need to reassess retirement plans.
The old goals of being able to retire at age 60 or 65 are often unaffordable when you are not buying your first home until you reach your early 40s. There simply isn’t enough money in the typical household budget to both repay a mortgage and save enough for retirement.
Starting a family later in life places financial pressure on the parents at a time when they need to be making the greatest level of provision for retirement.
The cost of a three or four year University education, which looks set to arrive at an average parental age of 47 before the middle of this century, can come at a time when career earnings tend to be rising quickly due to experience, and could therefore have the greatest impact on achieving financial goals.
We think that this Peter Pan syndrome is an important consideration in Financial Planning and merits further consideration.
Starting on key life events later in life is bound to either push back the achievement of other financial objectives, including retirement, or make achieving them far more expensive with less time available for funding and investment.
Photo credit: Flickr/amandabhslater
