Adult children sapping parents’ savings
Adult children are draining their parents’ savings and investments at an increasing rate of knots, as Scottish Widows reveals the position has got even worse over the past year.
Over half of parents have given or loaned their children or grandchildren thousands of pounds compared to a figure of 39% last year – an increase of 16%.
The second annual report from Scottish Widows reveals the average amount given by parents to their offspring is £12,610 making a total ‘savings sap’ of £67bn.
The research also reveals that 52% 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. This group of parents has already forked out more than the average amount (£14,525), and on average, think that they will have to donate another £11,585, meaning they are currently just over halfway through the ‘giving cycle’.
It’s obvious that parents have felt the pinch as a result of being ‘sapped’ for thousands of pounds. Over a third of parents (36%) planned to use the money in retirement and this could adversely affect them in their later years as a result of their adult children plundering their savings. However, it seems that their offspring’s needs are more immediate, as over four in ten (42%) adult children are using or have used their parental handouts to pay off debt.
Anne Young, savings expert at Scottish Widows, said: “It seems that although people could well be tightening the purse strings at a time when the credit crunch could affect finances, adult children are still managing to extract what they can from Mum and Dad.
“Both the amount of money given and the number of children ‘sapping’ has increased in the last year, to the extent that the overall sap fund is well in excess of £60bn. That’s a significant amount, and the glaring hole in parents’ finances needs to be replaced, or prepared for in the first instance, as the problem is clearly not going to go away.”