Parents have had to dip further into their savings and investments to support their adult children who have been hit by the recession, Scottish Widows has claimed.
In its annual Savings and Investment report, it has revealed that grown-up children are continuing to 'sap' their parents for money with the average amount being handed out increasing from £11,800 in 2009 to £13,660 this year.
Despite the amount of money being given or loaned out increasing, there has been a nine per cent fall in the number of parents giving their children money, with 47 per cent of parents admitting to helping their child financially this year.
Of those who had dipped into their savings, 35 per cent said it was to pay for their child's day to day spending and living expenses, while 38 per cent provided handouts to pay off their debts.
Commenting, Iain McGowan, savings expert at Scottish Widows believes that the findings of this report highlight the "double whammy" of the recession where children are relying on their parents.
"On the one hand, "generation Y" is looking ever more to its parents for help as it struggles to get jobs, credit and mortgages - and to clear debt. At the same time, the "Bank of Mum and Dad" is not as readily available as it once was, often for the same reasons. This means that fewer parents can afford to give or loan money, while those who can, are being asked to provide more," he said.
Scottish Widows claims that the immediate affect this savings 'sap' has had on parents is also "alarming". It has found that of those parents who have used their savings to help their children, 54 per cent do not think they will be able to replenish their savings in the future.
In addition, almost a third said they were now saving less, while 12 per cent said they have stopped saving altogether.
Concerned by this news, Mr McGowan has warned parents of the dangers of not saving for their futures.
"Parents will not only be extremely vulnerable to any unforeseeable circumstances such as salary cuts, but the extra handouts to their kids can also affect them in retirement, meaning they may have to work longer, or make their retirement savings stretch further. The earlier parents and children get into the habit of saving the better," he said.
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