New research reveals that many of us are draining our parents finances rather than controlling our own.
Cutting the purse strings has become a thing of the past according to a new survey published by Scottish Widows which revealed that adult children are increasingly relying on handouts from their parents to bail them out of financial difficulty and keep them in the black.
The survey found that on average, parents are loaning their children over £12610, a so called ‘savings sap’ that’s costing a nation of Mum’s and Dad’s over £67billion.
The situation has deteriorated significantly over the past year with over 55% of parents admitting to lending their children or grandchildren amounts in the thousands. This is a 16% increase on the previous year and shows how, in times of financial difficulty, many of us are still looking to our parents for assistance.
While 29% of parents gifted money to help their children onto the property ladder and 22% helped out with living expenses, over 40% of parents admitted to paying off their children’s debts for them. The latter figure has doubled in the past year and is a worrying indicator of how parents are being left to foot the bill for their children’s extravagance.
However, most parents questioned were more than happy to help their children stay afloat financially, even if it meant cutting back themselves. Despite this, over a third acknowledged that they had needed to draw on funds previously set aside for their retirement to do this.
Unfortunately, this drain on parental finances is only likely to get worse as the cost of living continues to escalate and ‘official’ credit becomes increasingly difficult to obtain. Scottish Widows found that over 50% of parents anticipate that their role as emergency bank isn’t yet over with many expecting to lend their children in excess of £25,000 during their lifetime.
While the bank of Mum and Dad is obviously a great asset to the children that borrow, it does leave parents in a predicament as in lending to their children they’re depleting the funds they’ll have available to support themselves through retirement. Whether children will be in a position to return the favour in later life remains to be seen.
