Parents and grandparents borrowing more for family members
By Helen Gradwell
Supporting children and grandchildren is pushing 1.7 million parents and grandparents to use loans, savings, overdrafts and payday loans, according to research from MoneySupermarket.com.
Grandparents' borrowing to support their adult children and grandchildren has been called 'greyday loans'. Of the grandparents who provide financial assistance to children over 18, over half have found it gets in the way of their own financial goals: 33% say they haven't saved as much as they'd wanted, and 18% still have loans and other borrowing that they cannot pay off.
Parents and grandparents have been using credit cards, overdrafts, savings and payday loans to tide them over whilst supporting their children and grandchildren. The main areas of financial assistance given by parents and grandparents include general living costs (58% and 41% respectively), helping with debts (25% and 14%) and funding education (34% and 23%).
The average amount of debt (not including mortgages) for parents and grandparents is £3,513.
The head of banking at MoneySupermarket.com, Kevin Mountford, commented: "Taking out additional borrowing to support family members is an honourable thing to do but people need to consider how they will repay the debt and how this will impact their lifestyle, especially if they are in, or approaching retirement. The ability to consolidate those debts onto a loan or credit card could be limited especially when your income may drop."
Image © iStockPhotos / Jonathan Maddock
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