Parents ‘Offering More Money Help To Grown Up Children’

Parents are increasingly providing their grown-up children with financial support, new figures show.

January 24, 2008 (FPRC) -- Research carried out by Equifax reveals that some 83 per cent of mums and dads are helping their offspring with the cost of higher education, while just over one in ten (11 per cent) are giving assistance in making the initial steps on the property ladder. The study also indicated that of the current parents who went on to study beyond their school years, only 39 per cent received any monetary help.

According to the firm, rising house prices, increases in university fees and a surge in general living costs are impacting upon both young and older people’s ability to manage their money. It was also suggested that in attempting to supplement their offspring’s finances parents could find themselves under financial pressure.

It is possible that this may lead them to encounter difficulties in meeting demands for payment on loans and plastic cards. Utility and grocery bills, as well as mortgage repayments could be three other potential areas in which consumers discover that they are developing in servicing due payments.

Neil Munroe, external affairs director for Equifax, said: “Overall living costs and the number of financial commitments taken on by young people have soared in recent years, with the consequence that parents are having to financially support their children past the age of 18 to a much greater degree than their parents did for them. Our survey revealed that whereas 50 per cent of 41 to 50-year-olds said that they never asked their parents for financial help, only 31 per cent of today’s 22 to 25-year-olds gave the same response.”

Research from the credit information provider also showed that over four-fifths (86 per cent) of parents state that they encourage their children to save money. However, with graduates often having low-paid jobs after leaving university, along with high levels of debt, Equifax claimed that this is not always possible. In turn, it was claimed that mums and dads are carrying out “forward planning” to help supplement their offspring’s spending in future years, with 31 per cent setting up a child trust fund.

The company went on to report that consumers wanting to get to grips with money management, whether this is to help their children or themselves with spending, should “look at all of your financial commitments” by obtaining their credit report.

In getting a copy of their financial history, it is possible that prospective borrowers may be able to identify any discrepancies with their file. This could allow them to get in touch with creditors and financial providers to make amends on their document, so improving the likelihood that they will be able to access cheap personal loans and other forms of competitively-priced credit in the future.

Taking out a loan could also be a means of providing financial assistance for those parents who are just starting a family. Earlier research carried out by Lloyds TSB Insurance indicates that the average child has goods of increasing value within their room. It was indicated the typical young boy or girl had items worth 1,720 pounds inside their bedroom last year, a rise from the 1,607 pounds noted in 2006. Findings from the firm also showed that one out of ten have gadgets and toys costing more than 3,000 pounds.

For parents looking for a competitive way to fund the purchase of such items, cheap loans may prove to be of assistance.

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