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