Parents step in to reduce their children's debts

16/03/2011

Parents are increasingly turning to debt advice companies for assistance on behalf of their children, according to research.

With tuition fees rising, parents are becoming increasingly concerned with assisting their children with debts associated with higher education.

According to research, the number of parents seeking debt advice to solve their children’s student debt is on the rise. The firm have reported an increase in the number of calls to their helpline and email responses from parents who are keen to tackle their children’s debt problems.

According to the Telegraph, even grandparents are playing a major role in assisting their grandchildren financially.

Dean Mirfin, group director at Key Retirement Solutions, told the Telegraph: “The bank of Gran and Granddad is definitely open for business even if the traditional High Street banks are tightening up – and crucially the money is a gift.

“Helping out family is a powerful motivation for retired homeowners and the sums being handed out are major amounts with a total of nearly £150 million given away last year

“The equity release group Key Retirement Solutions have found that grandparents paid out an average of £20,358 to help with the costs of higher education,” he said.

“Retired homeowners have around £770 billion of wealth tied up in their houses and many clearly feel financially comfortable enough themselves to be able to help others.

“It is crucial that families are involved when people take a decision to release equity from their home and if they are receiving the money all the better”.

John Fairhurst, Managing Director at Payplan, said: “Debt is part and parcel of society we can’t sweep it under the carpet and pretend it’s not happening. It needs to become part of the school curriculum, not just something touched on in economics, but a core subject taught to every pupil as early as possible.

“We send teenagers off to university and college and the grant system means they automatically rack up millions of pounds of debt between them. What advice or information is there beforehand to prepare them for this?”

On March 5 the BBC reported that two hundred members of Parliament had called for action to be taken to make financial education compulsory in schools, as more and more students take out credit cards and unsecured loans, throwing them into financial turmoil.

Tags; Debt Management and Banking, Current UK Economy, Income Worries and Debt, Credit Card Lifestyle,

• Share
• 
• 
• Store
• 
• Follow
•