Money fears for children revealed

MoneyMore than a quarter of parents believe their children will never be financially independent, a new report has claimed.

The research comes as families experience a squeeze on their budgets due to soaring household bills while youngsters have been unable to fly the nest as would-be first-time buyers needing to raise large deposits have struggled to get onto the property ladder.
The Legal and General Investments study found that 27% of parents believe they will never stop supporting their children financially and only one in five will be able to stop when their child reaches the age of 18.

Simon Ellis, managing director of Legal and General Investments, said: "The cost of living is going up and the cost of raising a child is going up with it. However, it is still shocking to find that 27% of parents never expect their children to be financially independent.

"With first-time buyers requiring large deposits and university fees set to reach almost £10,000 a year, bankrolling your children after their 18th birthdays is becoming a norm for many parents.

"This trend significantly increases the strain on parental finances and will no doubt change the way future parents save for their children. Understandably, all parents want to give their children the best possible start and offer them both choice and opportunity during their adult years."

The majority of parents are also relying on their own parents for financial support for their adult children. More than 65% believe contributions to their child's Isa will be made directly from grandparents.

Previous research from Legal and General Investments found that UK parents are currently putting aside on average £42.45 per month per child, creating a pot likely to reach £14,716 based on current deposit levels.

The study of 2,000 people in the UK also found that some one in 10 parents believe it is no longer their responsibility to fund their child beyond the age of 18 and are keen to instil financial independence.

© 2011 Press Association
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