Parents are having to support their grown up children and are doing so by remortgaging their homes in increasing numbers.
YUCKIES (Young Unwittingly Costly Kids) are behind around 28% of parents being coerced into raising funds to help their 18 – 30 year old offspring get a helping hand into life. Recent figures show a staggering 93% of parents are paying something towards their children's finances with around half saying that they are borrowing to achieve that goal.
The survey, conducted by leading Child Trust Fund provider the Children's Mutual, emphasises the lack of financial planning that had gone into preparing their children for the vagaries of later life. Two thirds of parents have or will reduce their spending to help support an adult child. Actions taken or considered include shopping more economically, selling cars and reducing energy usage.
Children's Mutual Chief Executive David White points out that reaching 18 does not mean financial independence for today's youngsters. What is clear is that only 13% of parents had regularly saved for their child's financial future whilst they were young.
Given these stark findings, the Children's Mutual emphasises the benefits of regular long term savings. Child Trust Funds were introduced by the government to help parents do just that.
All children born since September 1st 2002 receive a government voucher worth at least £250 to be invested until the child is 18. With additional contributions of up to £1,200 per year permitted from just about anyone, the Child Trust Fund is an option to help with long term planning. An additional voucher worth at least £250 is provided when the child reaches 7 and with the average monthly regular saving now increasing to £24 per month by those who do save, the financial nest egg available when the child reaches 18 could significantly reduce the unexpected burden on parents as their children mature.
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