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Parents likely to double financial support to children if repayment is guaranteed

  • 04/07/2022
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Parents likely to double financial support to children if repayment is guaranteed
Parents looking to financially support their children are likely to double the amount given if it is structured as a loan so repayment is guaranteed.

According to research by Generation Home, which surveyed 1,003 parents aged 33 and over, found that parents would part with an average £13,088 to support their children, but this rose to £22,093 if the money was guaranteed to be structured as a loan.

The survey found that one in 10 would give £10,000 to £50,000 but this doubled to one in five if they knew it was going to be repaid.

Over two third of parents, 67 per cent, said they would help financially and 26 per cent said they were happy to gift money without an agreement on how it was spent.

Just under half of parents, 46 per cent, said they would give money to contribute to a child’s first home, which compares to 10 per cent for higher education, wedding or a car.

However, over a third, 37 per cent, said they wanted to give financial support but were unable to do so, citing increased pressure from everyday bills and the cost of living crisis.

Sophia Guy-White (pictured), co-founder of Generation Home, said: “With so many factors stacked against first-time buyers amid the backdrop of this year’s even tougher financial climate, it’s easy to think the doors of the property market are completely slammed shut.”

She said Generation Home was committed to helping parents who wanted to financially support their children but feared uncertainty of gifting large sums towards a deposit.

Guy-White explained that its Generation Home Agreement transformed deposit gifters into deposit boosters through an interest-free loan.

She said it removed “awkward conversations” around financial agreements and would help more young people get on the property ladder, and everyone in the transaction would be protected.

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