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Adult Children Adding Financial Strain

25 August 2010

Retired parents are supporting their adult children through financial strain even though they no longer earn, new research reveals.

According to Aviva, 18% of parents set to retire anticipate their children will need financial help, with 30% of adult children questioned expecting to rely on their retired parents to some extent.

Helping children with a house deposit is the biggest reason for retired parents to lending finance, with nearly two thirds of parents anticipating helping their offspring buy a home and 44% of children expecting to receive the help.

A further 47% of parents expect grandparents to help fund the next generation with 30% relying on it as a source of income. 

“The financial landscape and the pressures on the modern family have massively changed over the last decade, as has the profile of a ‘typical’ retiree,” said Clive Bolton, Aviva ‘at retirement’ director.

“Rather than inheriting from their parents, our research suggests many adult children now expect financial help from their parents at a time of life when they may struggle to give it.  By discussing plans sooner rather than later, families can avoid confusion and disappointment later on.”

Many parents are concerned over supporting their adult children, with half of retired parents feeling ‘worried,’ ‘concerned’ or ‘angry.’  This concern amounts to 29% who fret their retirement income will become depleted as a result and 16% believing they may have to continue to work when they thought they could have retired.

However, research from the Scottish Widows Savings and Investment Report showed that one in ten adult children are giving back to their parents by supporting them financially, with over a third of these parents using the money to pay off debts. The average amount loaned to parents is £8,250 which is up from £6,500 in 2008.

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