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Working to pay off your parents?
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Parents Borrowing from Children to Ease Retirement
Writes Dan Drage dan.drage@consumerchoices.co.uk
A social role-reversal is taking place, as inter-family lending culture gets skewed by the credit crunch.
A survey by high street lender Scottish Widows (www.scottishwidows.co.uk) suggests hard-up parents are turning to their children for handouts in the light of increasingly tight budgets.
Sons and daughters in 7% of households surveyed have given money to their parents.
Of those parents who have borrowed money from their offspring, 35% said they used the funds to pay off debts, 15% to buy a car, and 14% for living expenses.
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"Although parents exhibited a keenness to bankroll their children during the younger years, more parents are asking for those loans back"
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It’s not all one way traffic though; the poll of 5783 adults showed 40% of parents had lent their children money towards the deposit on a house.
Although parents exhibited a keenness to bankroll their children during the younger years, more parents are asking for those loans back. The average handout from parents to their offspring was calculated at £6500.
Anne Young, Savings Advisor at Scottish Widows, had the following to say:
‘It's obvious that parents have felt the pinch as a result of being 'sapped' for thousands of pounds from their adult children, and are now turning the tables on them.’
The trend is expected to gain momentum as life expectancy soars, the economy sours and the cost of living increases.
Chris Eagle, Commercial Manager at Credit Choices, has an alternate plan for those about to retire:
‘If you’re reaching retirement age but still can’t manage to shake those debts, consider re-prioritising your debts and paying those with the largest rates of interest first. Also, research whether switching energy and other utilities suppliers could save you money. Finally, investigate if you’re eligible for council tax benefits from your local council.’
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