Debt help news: Parents turning to kids' savings for support

22/12/2009

Parents across the UK are increasingly dipping into their children's savings accounts as they struggle to cope with mounting housing debt and bills, it has been revealed.

With the cost of living continuing to rise and with many UK employers opting to freeze salaries, new research has found that as many as one in five parents have borrowed money from their kids.

Eight per cent of those polled by Engage Mutual Assurance even admitted that their offspring's money would be a crucial means of financing Christmas celebrations, while 12 per cent revealed that such accounts have been used to fund home repairs.

Just under half of those parents who have borrowed money from their children did so in the past five months, indicating that personal income worries are starting to grow across the nation and suggesting that many more people will be making seeking professional debt advice their number one New Year's resolution.

Commenting on the findings, Engage Mutual's marketing director Karl Elliott noted that, while most people are still able to budget for everyday spending, growing numbers are likely to be hit hard by "unexpected costs".

Recently, uSwitch reported that four in ten parents will give their children 'bargain' presents or sale items as gifts this year as many struggle with personal income worries.

Kevin Still, director of EuroDebt, commented: "Large costs like the car service or household repairs can hit a tightly strung monthly budget for six, with the result that the money needs to be found by borrowing from someone. This can include the kids Piggy Bank or savings accounts.

"When people start a Debt Management Plan [DMP] with EuroDebt, we make provision for annual expenses like getting the car through the MOT. Money needs to be set aside for 'emergencies' that may affect continuity of income or the well being of the family."

Tags; Income Worries and Debt,

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