Nearly eight in 10 middle-class parents (79%) have said that they are financially supporting their adult children, the Saltus Wealth Index report has found.

The report, which will be released in full on 28 June, also found that almost one in four (23%) of those providing support are helping with mortgage payments, and 20% are helping with rent. Furthermore, almost a third (32%) have said that they help with grocery bills.

The report surveyed more than 2,000 people in the UK with assets, including property, of £250,000 or more.

The average rate for a two-year fixed deal has recently surpassed 6%, pushing the average repayment on a 25-year £200,000 mortgage up £383.50 in just two years. Over a two-year period, that amounts to an extra cost of £9,204.

As a result, many households are struggling to cover the extra costs and are increasingly turning to the ‘bank of mum and dad’ for support.

Four in 10 respondents (39%) said that that rising mortgage rates are already putting a strain on their cash flow, with nearly half (47%) saying that further rate rises will cause issues.

Partner at Saltus, Mike Stimpson, said: “Our research shows just how much financial support adult children need in the current climate, and the lengths to which their parents are prepared to go to help them.

"Traditionally, parents have helped out their children with deposits on houses, and other investments that grow with them, but now, we're increasingly seeing clients forced to bring those investments forward to help their children with everyday costs such as mortgages and household bills.

“Saltus Wealth Index research shows one in four parents who are helping their children are doing so specifically to help with rising mortgage costs, and that one in five have reduced their own pension contributions in order to provide that financial support to their children, and we are certainly seeing this mirrored in what our own clients are doing.

“Many are now putting less money into their pension so that they can help their adult children with mortgage payments and utility bills, others have had their children move back in with them because they can't afford to pay their rent and some have even delayed their retirement so they can continue to provide support.

“While our research suggests that most parents are more than happy to help support their adult children where they can, this level of reliance is not sustainable. If the younger generation continue to rely so much on their parents, it is going to have a huge knock-on effect on the whole family. Their parents have been planning for their retirement – and in most cases, planning the best way to pass on an inheritance – based on their own needs, not necessarily the needs of their children. Many parents will now need to revisit their plans to ensure they are still realistic given these changes in circumstances.”

Share Story: