Why the Bank of Mum and Dad needs life insurance

Gareth Fuller/PA Wire

It used to be a great day, tinged with sadness, when parents finally bid farewell to their offspring as they left home and ventured out into the big wide world, independent at last.

For many, however, that experience is no longer a reality as millions of parents are finding that the cost of their children moving into adulthood is an ongoing one. Some even find themselves giving regular financial support to their adult dependants well into their 40s.
In fact, according to research from Sainsbury's Life Insurance, parents in the UK have forked out a staggering £34billion in loans and financial gifts in the last year alone.

And it's not just the Bank of Mum and Dad funding dissolute students, although tuition fees and student living expenses accounted for £1.6billion of that figure.

The point of the study is that for those parents funding university, they have to keep at the back of their mind what would happen if those funds were suddenly cut off, if, to put it bluntly, they dropped dead. Would junior be able to finish college?

The study found 53% of parents didn't have life insurance and that would probably mean the ability to fund one or more students, would be drastically curtailed. I realise there is a sense of scaremongering and self-interest in this for Sainsbury's Finance but you have to admit, it's a good point.

Other adult dependants still putting the squeeze on their parents include those who received a total of £8.4 billion for mortgage or rental deposits or payments, £3.5 billion for home improvements and £2.2billion to pay off debts.

Clearly, we're not a nation that believes in tough love.

And while it's female adult-children who are more needy in the 18 to 29 year old category, borrowing, on average, £2,427 from their parents in the last 12 months, compared to £1,113 for males in the same group, once they hit their 30s men become more reliant on their parents, being bailed out in the past year to the tune of £5,542 on average.

Women, however, seem to have grown a bit more financially independent by this age, and are given an average of just £2,017.

And it doesn't stop there. In the last 12 months, parents have parted with an average of £2,436 to help adult-children aged over 45. That's some long apron strings, seemingly mixed up with the purse strings.

All this reminds me. I must call my mum....
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