While most children grow up and leave home at some point – whether that’s to set off to university or move into a home of their own - it turns out there are some things many of them can’t leave behind. No matter their age.
Our recent study of 1,000 adults with grown-up children revealed a staggering three-quarters of parents still provide financial support for their children long after they have flown the nest.
Continue reading, below, to find out more about our surprise findings.
From holidays to homes
Parents are handing over up to £3,000 a year to help pay for expenses for their adult children, even after they have moved out of the family home.
Supporting their children through further education is one of the biggest - and arguably, most worthwhile - priorities for many parents, with almost a quarter bolstering their offspring’s finances during university.
With property prices rocketing, getting young people onto the housing ladder is likely to be one of the costliest and most strongly desired outgoings for parents - and 22 percent admitted they have provided money towards a deposit for a new home.
More than a quarter said they helped to pay for holidays, while almost one in five parents have forked out for DIY on their children’s homes.
On top of all this, the last 18 months have complicated things even further with many people facing additional financial problems because of Covid-19. Thirteen per cent of those we asked said they have had to step in to help their grown-up children as a direct result of the pandemic.
So, where is the money coming from?
Over a third of those we surveyed said that continuing to support their children into adulthood has impacted their own financial situation.
That’s not surprising when you consider that almost 20% of those we asked are helping their children out on a weekly or even daily basis, while almost a third are providing financial support every month.
Some parents have even had to take on a second job or put their retirement plans on hold to provide the necessary support, in fact two thirds said that they had resorted to dipping into their hard-earned savings to keep their children afloat.
More worryingly, many parents are getting themselves into debt with 15 per cent admitting they’ve had to use their credit cards and 11% using an overdraft to help their children out.
It’s a habit that 42 per cent of parents said they are keen to break in order to protect their own bank balance with a similar number wanting to educate their kids to be more financially independent.
On the flipside, more than half (52 per cent) said they wish they could give their children more money, although 46 per cent admitted they can already be ‘over generous’.
So, why do it then? Well, six in 10 said they enjoy helping their children out when it comes to covering their expenses, while 44 per cent admit they feel they have no choice but to do so.
An alternative option
Equity release offers a different route for parents who want to support their children, without the need to take on second jobs or compromise on savings they’ve built up throughout their entire lives.
However, just one in six of those we surveyed said they’d considered equity release, which is perhaps down to them not fully understanding exactly what equity release is – this was the case for over 65 per cent of people in our study.
If you’re one of those people, you’ll find that our website offers in-depth information on what equity release is, as well as detailing all of the different types of equity release plans so you can find a plan that could be best suited to your needs.
Our advisers are here to provide quality and impartial advice that covers the whole of the market and – don’t forget – that lenders will only accept an equity release application if you’ve received advice from an authorised and qualified adviser.
Almost a third of people we asked said their biggest concern about using equity release was devaluing their family’s inheritance. However, there are many ways to mitigate this by taking advantage of the features that today’s equity release plans offer. Your local Equity Release Supermarket adviser will be able to explain these to you and answer any other questions or concerns that you may have.
To find out more about how equity release could provide financial security in retirement, get in touch with the Equity Release Supermarket team on freephone 0800 802 1051 or email [email protected]