BOOMERANG GENERATION BLEEDS PARENTS DRY

 

Grown-up offspring are still relying on Mum and Dad for cash handouts well into their adulthood. Far from being totally independent, many adult children are holding out the begging bowl and asking, “Please Mum and Dad, can I have some more?”

A new report from Scottish Widows reveals over 10 million adult children have ‘sapped’ their parents’ savings. Four in 10 (39%) parents have dipped into money, put by for themselves, in order to help their children out, either as a loan or gift. The average amount given by parents to their offspring is ?12,300, making a total ‘Savings Sap’ of ?55 billion - approximately 6% of the total UK cash savings market.

The research also demonstrates an ever-increasing Savings Sap over the past 15 years, implying that adult children may plunder the older generation even more in the future. ?11 billion – or 20% of the total Savings Sap amount – was given just in the past year alone.

• Half (49%) of all parents that have already given money to their children are expecting to have to dig deeper into their pockets and shell out again in the future.

• Three-quarters of parents (76%) have given a substantial amount of money more than once.

• Three in 10 parents are forking out a staggering five or more times.

It also seems that parents have completely resigned themselves to being continually sapped for money with half-saying it’s what parents ‘have to do these days’. A further quarter of parents feel their children need it more than they do.

Unprepared parents suffering savings shortfall

Almost half of parents (45%) think they will not be able to top up their savings to the pre-plundered amount. A third of parents say that in order to try and restore their savings, they will have to cut back – on luxuries (20%) , but more worryingly, on day-to-day spending as well (13%). 16 per cent of parents had planned on using the money to fund their own retirement, or were saving for a rainy day.

Anne Young, savings expert at Scottish Widows comments: “Our research shows that parental responsibility no longer ends when your children reach adulthood but lasts for many years after that. 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 – but they might want to keep it secret from their children until they need to use it!”

Children are using their Savings Sap gifts for a number of reasons, the main one being a helping hand on to the property ladder:

• House purchase/deposit (29%)

• Car (23%)

• Household/furnishings (15%)

• Paying off debt (14%)

• Living expenses (11%)

• Education fees (6%)

• Travelling (6%)

Scottish Widows was founded in 1815 as Scotland’s first mutual life office. Becoming part of the Lloyds TSB Group in 2000, Scottish Widows has become one of the most recognised brands in the life, pensions and investment industry in the UK.
 
 

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