Almost a third of parents are dipping into retirement savings to help support their grown-up children.
As many as one in six are giving their children money regularly to put away, while twice that number worry their offspring are not saving enough, according to research by Aldermore Bank.
Helping children get on the property ladder is the most common reason for giving cash. Many do not stand a chance without financial help, as house prices rise by another ten per cent in a year to £294,000.
Helping hand: As many as one in six are giving their children money regularly to put away, while twice that number worry their offspring are not saving enough
Estate agent Blackstones Residential says parents typically give children £30,000 to help them buy their first home.
Ewan Edwards, head of savings at Aldermore Bank, says: ‘Despite the current financial crisis many parents are now prioritising their grown-up children’s finances over their own.
‘It is natural to want to help loved ones but it is concerning this might come at the expense of providing an adequate financial safety net for old age.’
If planning to give money to your child for a deposit you need to check the rules on inheritance tax. You can give away up to £3,000 a year as an ‘annual exemption’ without it counting towards this tax.
It can be backdated a year if you have not given them cash before and is available to both parents so is potentially worth £12,000. If you give away larger amounts, the gifts may attract tax if you die within seven years.
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