Two thirds of parents paying kids’ housing costs

Sam Cordon

October 10, 2013

More than two thirds of parents (67%) said they have subsidised their children’s housing costs in some way with 17% admitting they had contributed to a deposit and 33% of stating they had handed over £5,000 and £20,000.

Steve Wilkie, managing director of Responsible Equity Release, said: “Every parent wants the best for their children and few ever begrudge them a penny.

“But our research shows that for many parents the financial commitment extends well beyond the day when their children fly the nest.”

Wilkie said the rising cost of living and the large deposits demanded by mortgage lenders are all expenses that young adults struggle to meet alone.

He said: “As a result the bank of mum and dad is funding more aspects of children’s lives and for longer.”

The age range of the parents surveyed was between 55 to 65 which Wilkie said was a time when the imminent approach of retirement usually encouraged people to focus on their own finances and their pension preparations.

But instead of saving hard for their own retirement the findings revealed that most are still bankrolling their children.

He added: “In an era when annuity rates have collapsed and inflation is eating away at the value of pensioners’ savings we all know we should be saving more not less into our pensions.

“But at least those who feel they cannot do so have other options. With house values on the rise once again we are likely to see many more of us using equity release to unlock the value of our homes in retirement.”

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