- 40% of parents with adult children have helped out with debt problems
As many as 7.5 million parents have had to help adult children pay off their debts with the average family forking out £2,540 on behalf of their kids, according to new research by MoneyExpert.com.
The independent financial comparison website says parents with adult children face a heavy burden of debt ranging from unpaid credit cards and student loans to overdrafts, personal loans and even missed mortgage repayments.
The figures show that 40 per cent of parents with adult children have had to pay or help pay off debts racked up by their kids. The most popular forms of child debt slashed by parents are mobile phone bills, car finance and credit card bills, although nearly one in ten parents have had to help their child keep up with mortgage repayments.
|†||Type of Debt||% of parents with adult children who have paid or helped to pay debts in past three years|
|1=||Mobile Phone Bills||24%|
|3||Credit Card Bills||23%|
Sean Gardner, Chief Executive of MoneyExpert.com, said: "Having a child is an expensive business and unfortunately spending on your kids doesn’t stop once they reach adulthood.
"With the cost of living so high at the moment and with so many people living a buy-now-pay-later lifestyle, parents are often forced to help out their children financially in later life. Whether it’s an overdue credit card bill, an unauthorised overdraft or even a missed mortgage repayment, millions of parents are forking out on behalf of their children."
MoneyExpert.com has called this practice SKIDDING – Slashing Kids’ Debts – and likens the trend to the well-known process of SKI-ING, whereby retired parents start spending their hard-earned savings instead of hoarding cash for their children to inherit in later life.
Sean Gardner added: "The phenomenon of ‘SKIING’ is well known and has been heralded as just rewards for retired parents keen to spend their hard-earned savings. It seems that SKIING is just the natural progression from years of SKIDDING, where parents have spent thousands of pounds bringing up their children and then baling them out when they can’t manage their own debts."
According to the MoneyExpert.com study, parents who have paid for their adult children’s debts have spent on average £2,540 over the past three years. The majority of parents (51%) fork out between £200 and £2,000, although some 13 per cent claim to have spent between £5,000 and £20,000 clearing their kids’ debts.
Regionally, the Midlands is the child debt capital of Britain, with the average debt paid by parents as high as £2,739. The cheapest area of the country for parents is Scotland, where the average parent only forks out around £2,265 to cover their children’s debts.
MoneyExpert.com recently reported that more than 2.48 million adults are very concerned about their ability to keep on top of their debts as recent interest rate rises start to hit home.
What should you do if you’re concerned about your debts?
1. Use MoneyExpert’s debt consolidator calculator and see how much you could save in monthly payments with a consolidation loan
2. Transfer your credit card balance to an 0% Balance transfer credit card
3. Talk with someone – the citizen’s advice bureau is always a good place to start
4. Click through to MoneyExpert for money saving hints and tips
*YouGov interviewed 2,511 GB adults (18+) between 7th and 11th September 2007