According to the Saltus Wealth Index, which surveyed 2,005 adults 18 and over who have £250,0000 or more in investable assets, around 79 per cent are helping support their children financially in some way.
It added that around 42 per cent were helping to pay for school fees, 32 per cent were covering groceries and a further 20 per cent were helping with rent.
The research continued that four in 10 respondents said that rising mortgage rates was putting pressure on their own cash flow, and a further 47 per cent said continued rate rises would cause problems.
The report noted that 22 per cent had cut their pension contributions, 20 per cent had tapped into their housing equity and 20 per cent had sold an asset to help their children.
Around seven per cent of respondents aged 45 and over said their children’s wellbeing was their greatest concern, above losing money and their own health and safety.
Parents now helping with everyday costs
Mike Stimpson, partner at Saltus, said that research shows “how much financial support adult children need in the current climate” as well as the “lengths to which their parents are prepared to go to help them”.
He noted that traditionally parents have helped children with deposits on houses and other investments that would grow with them but the firm was increasing seeing “clients forced to bring those investments forward to help their children with everyday costs such as mortgages and household bills”.
Stimpson said that many clients were putting less money into their pensions to help their children with mortgage payments and other bills, mirroring report findings, and others were having children move back in with them due to high rent costs.
Parents delaying retirement for their kids
He added that some had delayed their retirement so they could continue to offer support.
Stimpson continued: “While our research suggests that most parents are more than happy to help support their adult children where they can, this level of reliance is not sustainable. If the younger generation continue to rely so much on their parents, it is going to have a huge knock-on effect on the whole family.
“Their parents have been planning for their retirement – and in most cases, planning the best way to pass on an inheritance – based on their own needs, not necessarily the needs of their children. Many parents will now need to revisit their plans to ensure they are still realistic, given these changes in circumstances.”
