I know it is a common phrase – ‘The bank of mum and dad’, and as parents we always try and do everything we can for our children, but are we really helping them?
According to a recent survey produced by Skandia, the majority of young adults still rely on their parents for financial support.
Because of this attitude, an ever increasing worry and burden is being placed on these parents who ignore their own financial problems in order to help their offspring.
One of the most common ways for parents to help out their children is by raiding their own savings / retirement plans. At least 90% of the 750 couples surveyed were quite willing to sacrifice their own finances in order to meet their offsprings` expectations, making personal sacrifices in order to contribute towards holidays, clothes, house deposits etc. However, these parents using their savings could be making problems for themselves in the future.
Research from The Chartered Institute of Personnel and Development revealed that many older parents nearing retirement could be at risk of redundancy in today’s economic climate. Many who would like to continue working after the age of 65 can legally be forced to retire.
Dr. John Philpott (Chief Economist for the Institute) said ‘there would be hidden redundancies masked as early retirement’. This means that a company could place the financial burden on a pension scheme rather than themselves.
This survey gives an important insight into a group (25-32 yrs) that was previously seen as discerning consumers with high disposable incomes.