Parents ‘Helping Grown Up Children Pay Off Loans’
Keywords: loand, debts, debt, consolidation, personal, secured, finance, credit, cards
Millions of parents are helping their grown-up children pay off their debts, new figures reveal.
In statistics released by MoneyExpert, some 40 per cent (7.5 million) of adults with grown-up children have given their offspring aid to either pay off completely, or to contribute a payment towards, money owed on utility bills, loans and other areas of financial demand. As a result, the price comparison website stated that parents “face a heavy burden of debt” in helping their sons and daughters - which in turn could impact their own ability to manage their finances and make loan repayments.
Mobile phone bills and car finance deals are the largest sources of debt parents have helped their adult offspring to meet the costs of during the last three years - each accounting for 24 per cent of respondents. These were closely followed by credit card bills which have been paid for by 23 per cent of parents. Six per cent of respondents have also aided their children in making payments on unsecured loans, as one in five (20 per cent) help with overdraft costs. Meanwhile, about one in ten have shelled out their own money to make payments on their child’s mortgages, in comparison to the two per cent who have contributed towards secured loans.
Research from the price comparison website also showed that those paying their grown-up children’s debts have spent some 2,540 pounds over the last three years doing so. Although most (51 per cent) are shelling out between 200 and 2,000 pounds in financial aid, some 13 per cent have spent between 5,000 and 20,000 pounds - which in turn could increase pressure on their ability to manage their own finances.
Commenting on the news, Sean Gardner, chief executive of MoneyExpert, 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.”
Overall, the Midlands is the “child debt capital” of the country, as parents are paying an average of 2,739 pounds to service money owed by their offspring on loans, credit cards and other forms of borrowing. In comparison, consumers in Scotland are contributing the least towards their children’s debts - at a typical amount of 2,265 pounds. Meanwhile, the firm stated that over 2.48 million adults are currently “very concerned” about how they will be able to manage their finances as the five interest rate rises carried out by the Bank of England since August last year begin to take effect.
As a result, those worried about their capacity to handle their money, whether they are a parent or one of their grown-up children looking to become financially independent, may wish to take out a debt consolidation loan as a means of tackling money owed to various creditors. By merging existing loans, overdrafts and credit cards into one low-rate monthly amount, consumers could well find they have more money available to spend. However, Adrian Coles, director general of the Building Societies Association, advised those wishing to apply for a loan to ensure that they will always be in a position to afford repayments.
Tom Dawson is the Editor in Chief for Essentially Home Loans where visitors can apply for cheap loans online. We also specialise in debt consolidation loans, and secured loans. Visit our site today www.essentiallyhomeloans.co.uk
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