Parents savings 'increasingly drained by adult children'

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Parents savings 'increasingly drained by adult children'

Fri 5th Mar 2010

Iain McGowan, savings expert at Scottish Widows, said the recession has affected young people who are trying to clear debt but struggle to find a job.

From an analysis of research undertaken by the mutual life office, he remarked that children turn to their parents through lack of income and this in turn prevents them from saving.

He said: "Parents will not only be extremely vulnerable to any unforeseeable circumstances such as salary cuts, but the extra handouts to their kids can also affect them in retirement."

Mr McGowan added that the earlier parents encourage children to save by using tax efficient means, such as an Isa, the more money will be available for them in the future.

It was found that almost half of parents with adult children have loaned or simply given them money and more than a third of this money was used to pay off debts.

The Children's Mutual revealed recently that student debt is often more of a burden for students without parents to repay their expenses.

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