Parents forking out for offspring debt
September 19, 2007 by admin
Filed under News, News-Loans
Some 7.5 million parents are having to financially support their adult children, new research has found.
A MoneyExpert survey found that 40 per cent of parents with adult children have to help out with debt problems, with some £2,540 being paid per family on average.
Mobile phone bills and car finance were the most popular debt types that 24 per cent of parents have helped to cover the cost of, closely followed on 23 per cent by credit card bills.
Overdraft finances on 20 per cent and student loan debts on 15 per cent also featured as the fourth and fifth most common types of debt.
MoneyExpert chief executive Sean Gardner commented that the figures reveal that child expenditure is now a financial burden for many parents even when their kids reach adulthood.
“With the cost of living so high at the moment and with so many people living a buy-now-pay-later lifestyle, parents are often forced to help out with their children financially in later life,” he added.
Recent statistics from the debt charity Credit Action reveal that the average graduate debt for adults under the age of 30 is £12,363, but the figure represents both a decrease of £889 on 2006 and the first drop in graduate debt for six years.
Young adults spending parents’ money
March 6, 2007 by admin
Filed under News, News-Banking
The current generation of young adults still rely on their parents for financial handouts, according to research.
Scottish Widows says that many people have become so bad at banking and managing their finances that poor old mum and dad are having to spend their savings on helping out the kids.
The firm claims that ten million ‘adult children’ have used money from their parents’ savings, with 39 per cent of parents spending cash which they were saving for themselves.
Most parents give a total of £12,300 to their children as either a loan or a gift, meaning the UK’s parents are losing a total of £55 billion to their kids.
“Our research shows that parental responsibility no longer ends when your children reach adulthood but lasts for many years after that,” said Anne Young from Scottish Widows.
“Parents may be shocked to learn that their savings could be sapped by about £12,000 after their children leave home. We recommend they try to prepare for the possibility of this happening by creating their own Savings Sap fund.”
The money is generally put to good use, with 29 per cent of ‘adult children’ spending it as a deposit towards a mortgage for a new house.
A further 23 per cent spend it on buying a new car, 15 per cent on buying furniture and 14 per cent on clearing debts.
