Parents forecast ‘Bank of Mum and Dad’ will last for decades

Lumbered with their children’s debts and the prospect of housing their offspring well into their 30s are amongst the top fears keeping parents across the UK awake at night, according to a new report from long-term investment provider Skandia.

Two in five parents (40%) admit to worrying that it will be their responsibility to help their children pay off debts as they grow older - debts parents anticipate their children will have well into their 30s.

At a time when the number of first-time buyers has fallen by 41 per cent since May 2007, more than a third of parents (34%) expect to provide a home for their children throughout their adulthood. Furthermore, at a time when house prices are still high relative to income, almost one third (31%) of parents fear their children will sacrifice a safe community for an affordable home.

One year on since the start of the credit crunch, Skandia questioned more than 300 parents with children under the age of 18 about their fears for their child’s financial future. The top five are listed below:

Top fears for parents - Percentage

Retirement will no longer exist when their children grow up 48%

They will have to pay off their children's debts until they are into their 30s 40%

Their children will avoid getting married or having children of their own due to the costs involved 37%

Their children will have to live at home until they are in their 30s 34%

Their offspring will buy a house based on price instead of community 31%

Pensioners to become a thing of the past

As the UK is celebrating the 100th anniversary of the state pension system this month and the Government announces that the official age of retirement for both men and women will be raised to 68 by 2046, almost half of the parents surveyed (48%) admitted that they fear retirement will no longer exist by the time their children grow up.

Family life is too expensive

With the average cost of a wedding now topping £20,000, more than one in three parents (37%) fear that their children will never get married or have children of their own because they will not be able to afford it. With marriage rates already at their lowest since records began, these latest findings could point to a future where a family is considered to be a ‘luxury’, rather than the norm.

Starting now before it’s too late

The report also confirms that although parents have fears for their children’s financial future, they are already preparing to help them. Almost half of (45%) parents are either saving or investing to help their offspring get their foot on the property ladder. Furthermore, more than two in five parents (43%) are saving or investing to help their children cope with their future debt. In a similar vein, more than a third of (39%) parents are currently saving or investing to help pay for their child’s wedding or to help raise their grandchildren.

Michelle Cracknell, Strategy Director at Skandia, commented: “Our report suggests that a large proportion of parents see their child’s independent adult life starting when they are in their 30s. This is likely to put a financial strain on parents as they approach retirement age. However, it is encouraging to see a significant number of parents are already putting money aside to help their children realise their financial dreams.

We would urge parents to take the time to speak to a qualified financial adviser who will offer them sound advice on potential investment solutions which will help them realise their financial goals.”