Wednesday, January 21, 2009
Category:
Consolidation
According to research conducted by Engage Mutual, over a quarter of parents with children over the age of 25 are giving them financial support, with 31% still providing hand-outs.
During this period of economic unrest, it would appear that young people are relying on their parents more than ever where their finances are concerned. According to the results of Engage Mutual’s research, during which they asked parents across the UK how they had helped their grown-up children financially during the six months leading up to September 1st 2008, over 25s are still not financially independent.
There were three key findings with regards to parents financially supporting children over the age of 25. Firstly, with home loan approval rates at a record low and property ladder negotiations proving increasingly challenging, 46 percent of parents have helped their children to cover the expense of moving house or purchasing a new home. Secondly, with the cost of education becoming more difficult to afford (the average student debt has increased to £17,504), 23 percent of parents have contributed towards their children’s education or student loan repayments. Thirdly, with a large proportion of adults in their 20s struggling to save, one in ten parents of over 25 year olds have made regular investments into their children's savings accounts (11 percent).
Nick Breton, 3GB spokesperson for Engage Mutual Assurance commented: "Our research shows that the financial connections between generations are becoming more profound. British parents are providing more financial support to their adult children who are finding it increasingly difficult to stand on their own financial feet.”
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Homeowners still reliant on parents for support wishing to cut the apron strings could consider taking out a secured loan. A secured loan could fund those much needed home improvements or provide a means of debt consolidation, leaving the borrower with just one, potentially lower monthly repayment. Secured loans can usually be repaid over a term to suit the borrower, from 5 to 25 years. When repaying borrowing over a longer term, it should be remembered that this may increase overall interest charges.
