More young adults are struggling to get jobs and make ends meet, so they are having to rely on their parents more than ever for support. This can be a real burden on parents – but it needn’t be with an offset mortgage.

According to research from Scottish Widows, adult children are continuing to ‘sap’ their parents’ savings and investments and while the average amount being handed out has increased significantly, the number of parents able to give has fallen. 

Almost half of parents with children over 16 have given or loaned money to their adult children or grandchildren – the average amount given to struggling kids is £13,660, up from £11,800 last year, proof that those parents who are able to give are being forced to give more as their children struggle.

The immediate effect the saving sap fund has had on parents is also alarming – 82% of parents who gave money to family members had to dip into their savings to do so, and worryingly 54% of these do not think they will be able to top that back up.

Iain McGowan, savings expert at Scottish Widows says: “Fewer parents can afford to give or loan money, while those who can, are being asked to provide more. Parents will not only be extremely vulnerable to any unforeseeable circumstances, but the extra handouts to their kids can also affect them in retirement, meaning they may have to work longer, or make their retirement savings stretch further. The earlier parents and children get into the habit of saving the better.”

If you have an offset mortgage, you can take out the lump sum saved against it whenever you need it. It won’t make you more indebted but it will only increase your mortgage rate by a small amount each month. But crucially you will be able to help your kids and keep yourself safe at the same time.

SOURCE: Scottish Widows, 03/03/10

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