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Boomerang generation bleeds parents dry

7 March, 2007

A new report from Scottish Widows reveals over 10 million adult children have ‘sapped’ their parents’ savings. Four in 10 parents have dipped into money, put by for themselves, in order to help their children out, either as a loan or a gift.

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The average amount given by parents to their offspring is £12,300, making a total ‘Savings Sap’ of £55 billion – approximately six per cent of the total UK cash savings market.

The research also demonstrates an ever increasing Savings Sap over the past 15 years, implying that adult children may plunder the older generation even more in the future. £11 billion – or 20 per cent of the total Savings Sap amount – was given just in the past year alone.

It also seems that parents have completely resigned themselves to being continually sapped for money with half saying it’s what parents ‘have to do these days’. A further quarter of parents feel their children need it more than they do.

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Unprepared parents suffering savings shortfall

Almost half of parents think they will not be able to top up their savings to the pre-plundered amount. A third of parents say that in order to try and restore their savings, they will have to cut back on luxuries, but more worryingly, on day-to-day spending as well.

More than 15 per cent had planned on using the money to fund their own retirement, or were saving for a rainy day.

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Anne Young, savings expert at Scottish Widows, said: “Our research shows that parental responsibility no longer ends when your children reach adulthood but lasts for many years after that.

“Parents may be shocked to learn that their savings could be ‘sapped’ by about £12,000 after their children leave home. We recommend they try to prepare for the possibility of this happening by creating their own Savings Sap fund – but they might want to keep it secret from their children until they need to use it!”