Having kids later in life could help to build financial resilience: Sarah Coles

So, it’s hats off to the legions of older parents who emerged in government data this week. The age at which we have kids has been rising for decades, and 2024 was no different.

The most common age for mums to have their first baby is 32, but the largest rise was among mums aged 35-39, and there were almost 300 babies born to a mother aged 50 or over.

Births to older fathers were even more striking, with almost 9,500 births where the father was aged 50 or over, and almost 1,000 where he was over 60. In fact, there was a 14% rise in births where the dad was over 60.

It's no surprise that people are waiting to start a family. The long-term trend is partly fuelled by the fact that women are more likely to go into further education and want to make headway in their career before having children.

Couples are also more likely to live together for longer before considering marriage or children, so they’re more established in their relationship – it’s one reason why the divorce rate is falling. All of these feel like positive developments.

However, there are also some pressures holding people back - notably that young people are more likely to live at home thanks to runaway rents and sky-high property prices.

On average they don’t move out until the age of 24, and many of them will return either at the end of a relationship or when they’re trying to save money to buy a home of their own.

Not everyone wants to start a family from their parents’ spare room, so it tends to push life’s milestones further down the track.

It's nobody’s business when you start a family, or why you make that decision. However, it’s important to understand the impact it will have on your finances – so you can plan for it.

There are some benefits in having kids later, because there’s a good chance you can build some financial resilience first. You could start life as a parent with more savings to fall back on, a home of your own, and decent pensions and investments under your belt.

You may also be more senior at work, and able to exert more influence over how flexible your working arrangements can be.

For those much older fathers, there’s also a chance that you will be retired early in your child’s life, so you can play a key role in caring for them, removing the worry of childcare costs.

However, there are some thornier issues too. When the kids are younger, your own parents will be a bit older, so they may not be in a position to offer any care – which could mean planning for bigger childcare bills. In fact, they may actually need more support themselves, so you face the challenges and costs of being a sandwich carer. It’s worth talking to your parents to see what plans they have in place, and how it could affect you.

If you’re planning to retire while the kids are still living at home, consider how you’ll pay the bills during the expensive years. It’s likely to mean you need as much as possible in your pension or SIPP, to build a robust income.

If you plan to keep working later in life, you also need a plan B, just in case your health forces you to stop work before you’d ideally like.

You need to think about insurance cover too. This is vital for parents - whatever their age - but it’s even more pressing when one or more of the parents are much older. You need life insurance in place to ensure your children are supported for as long as they need it if you were to pass away. You should also consider critical illness cover and income protection – both of which provide support if you suffer an illness or injury. It’s vital to make a will too, including details of who will take care of your children if something was to happen to you.

You also need to think about how old you’ll be when they move out. Typically, the ‘empty nest’ period is when people see their spending fall significantly, so they can supercharge their retirement savings. If this period is squeezed – or doesn’t arrive until you’re retired - you need to prioritise your pension earlier in life.

There will be an impact on where you live too. If you want to trade up to a larger property when you’re older, you may need a larger mortgage, but some lenders will insist you borrow for a shorter term, so monthly repayments could be considerably higher.

At the other end of the spectrum, there’s the issue of downsizing. If you have children at 60, you may not be able to consider freeing up the equity in your property until your mid-80s, so you need to consider other options for supplementing your pension income – such as savings and stocks and shares ISAs.

None of these problems are unsurmountable, and there is clearly an enormous amount to be celebrated about having children later in life. A friend of mine has just retired and he’s loving being there for the primary school run and being part of his young children’s lives. Personally, I barely had the energy in my 30s, let alone now, but then again, maybe my kids were just particularly argumentative.

JISA opens the door to investing – and not just for the kids

It’s well established that having an investment Junior ISA can be a brilliant way to introduce children to investments. However, HL data shows it’s a key first step for many parents too. Around one in five parents who open a JISA for their child as their first step into investments will follow it up by opening an ISA.

The JISA may be owned by the child, and possibly paid into by grandparents, but it’s the parents themselves who’ll make the investment decisions. Over the years, they’ll monitor the portfolio, and they’ll often use it to introduce their children to the world of investment. For some parents, it’s a gateway into learning about investments for themselves.

We can’t know for sure that this is the first investment ISA they have ever owned, but there’s a clear pattern of people opening a Junior ISA for their children, getting started with investment, and then going on to open an ISA for themselves.

It’s never too late to start, and this is a brilliant way into investing, but there are huge advantages of getting in earlier. If you began investing at the age of 18, and put in £50 a month to the age of 60, growing at 5% a year, you could end up with £85,567. If you waited to the age of 35, your nest egg at 60 could be £29,775. It’s still an incredibly useful sum of money, but the difference is striking.

Sarah Coles Head of Personal Finance and Podcast Host for Switch Your Money On Headline Money Press Team of the Year Hargreaves Lansdown