Three-quarters of parents financially support adult children
A majority (75%) of parents still help support their grown up children despite having left home, said Equity Release Supermarket.
The equity release advisory service found that parents hand over nearly £3,000 a year to their grown up children to help pay for food, cover household bills or even help them buy their first home.
The study also revealed that 22 per cent of parents want to help their children get onto the housing ladder.
Impact on parents
Some parents have taken second jobs, started working again, or even delayed their retirement to get the extra money needed to provide support.
Worryingly, 36 per cent of parents admitted giving money to their children on a regular basis has impacted their own financial situation and two-thirds have dipped into their own savings pot.
While six in 10 like helping out their children, 44 per cent admit they feel they have no choice but to do so.
Mark Gregory, CEO at Equity Release Supermarket, which commissioned the study, said: “Despite children growing up and moving out of the family home to live their own lives, many still have to rely on their parents or grandparents for financial support.
“As a result, parents often sacrifice their own savings, equity, or later life plans in order to provide for their children, whether that be general lifestyle items, helping with a new house deposit, or indeed purchasing their first home.
“There are potential options available that would allow adults to support their children whilst also fulfilling their own financial wishes, which is where equity release could come into play as one potential solution.”
Equity release option
The study, carried out via OnePoll, also found that nearly one in six adults have considered an equity release to financially support their children.
Gregory added: “Some parents have considered equity release but are hesitant to make the first step in taking out a plan. This is perhaps down to them not fully understanding exactly what equity release is, as our study identified that this is the case for over 65 per cent of parents.
“Whilst it’s not the only option to raise capital to support your children or provide an enhanced retirement, equity release could be beneficial and should always be considered with the right financial advice.”