Over two-thirds (69%) of people say that parents supporting adult children financially has an emotional impact on the entire family, according to the latest research from the Equity Release Council.
It is not just young adults who borrow money from their family; almost a third (30%) of people aged from 18 to 54 turn to their parents for help when they need a little extra cash. Broken down this equates to over half (51%) of those aged up to 24, over a third (34%) of those aged 24 to 34 and – while the need for support decreases with age – almost three in ten (29%) of those aged 35 to 44.
Common issues experienced were said to be frustration at varying levels of help enjoyed by different siblings (11%) and annoyance at the continuing need for parental support (11%).
In addition, one in ten (10%) families keep secrets from each other in order to conceal the amount of help given, while a further 10% worry that their parents will need the money in later life. Nine per cent feel embarrassed at having to turn to their parents for help in the first place.
Nearly half (43%) of people worry about whether they will be able to help their own children financially in adulthood, rising to 56% among 24 to 34 year olds and 60% among 18 to 24 year olds. Over a third (26%) of all ages are concerned about whether their children will ever be able to survive financially on their own in the future, with the greatest concern among those aged 35 to 44 (42%).
Nigel Waterson, Chairman of the Equity Release Council, comments:
“Many people are currently trying to come to terms with higher travel costs and energy bills for the coming year, so there is already a lot of pressure on families. Intergenerational lending, particularly the ‘Bank of Mum and Dad’, seems to be becoming the preferred method of borrowing, but as the findings of our research show it can come at an emotional cost.
“It is understandable that parents want to help their children, but this can create a real dilemma for those who don’t have the resources. Yet, in the majority of cases, there is substantial wealth tied up in the family home and through the use of equity release, this can be unlocked and used to tackle financial pressures across the generations.”