Adult children had to dig deeper last year than in 2008 to finance the effects of recession on their parents, as the average has increased from £6,500 in 2008.
The Scottish Widows Savings and Investment report revealed that adult children/grandchildren have borrowed over £13,000 from their parents; however parents are now having to go back to their children to ‘sap back' the money they may have previously given.
In 2008 the average children's handout to their parents was over £6,500 making a total ‘sap back' figure of £11 billion.
Of those parents who have borrowed money from their adult children, most have done so in the last 12 months (42%), over a third (37%) said they used the handout to pay off debt, and worryingly a third (33%) have used the money for spending money/living expenses, a significant increase from 14% in 2008. 16% needed the money for a house purchase or deposit.
Iain McGowan, savings expert at Scottish Widows commented: "Parents are feeling the pinch, and therefore the Bank of Mum and Dad has decided to call in its debts and sap more money than ever from their children. In many cases, these parents leant money to their children earlier in their lives, which has left them out of pocket and needing to reclaim some of it.
“The fact that over a third of parents are using these cash handouts to pay off debt and a third for day to day living expenses demonstrates just how crucial this help can be. Indeed it is likely more parents will have to ask their kids for money in the future, particularly parents who are near to retirement and are struggling to put enough money aside."
The research has shown that grown-up children are also leaving themselves exposed by handing out money to their parents; 28% of those who had given money to parents had to dip into their savings and investments in order to give their parents money, and the ‘sapping' may not stop there. 35% of those that gave money to their parents believe they will have to give or lend their parents more money in the future. The average amount they believe they will have to give in the future is £2,024.
