'Parent banks give £11k to kids'

25 February 2009 12:15am

More than half of parents have given money to help out their adult children or grandchildren, handing over five-figure sums each, research showed.

Around 56% of people said they had given or lent money to their offspring, parting with an average of £11,776 each, according to Scottish Widows.

Nine out of 10 parents said they had had to dip into their savings or investments to raise the money, while 17% were forced to take on debt.

But despite 22% cutting back on their daily spending, 46% of parents do not think they will be able to top up their savings to replace the amount taken out, while those who think they will be able to replace it, claim it will take them an average of two years and four months.

Around 27% of people said they were saving less and 11% have stopped saving altogether as a result of helping out their children financially.

Just over a third of parents who have given money to their children or grandchildren said they had planned to use the cash to help fund their retirement.

But despite already handing over an average of more than £10,000 each, 49% of parents who have helped their children or grandchildren think they will have to help them out again in future, advancing a further £12,564 on average.

One in four people who received money from their parents or grandparents said they needed it to meet day-to-day living expenses, while 38% used the cash to pay off debt and 30% put the money towards buying a house.

© The Press Association