Scots Owe Their Parents an Average of £3,000, Study Finds
June 15, 2016
A study by the Bank of Scotland has found that a typical Scot owes their parents as much as £3,000, with the so-called ‘bank of mum and dad’ now a major lender nationwide.
In fact, research by the bank and its ‘How Scotland Lives’ report suggests that Scottish parents have lent their children a collective total of £582 million.
Thankfully, in a majority (52 per cent) of cases, the lenders in these scenarios are happy to help out their loved ones via financial support.
However, almost the same proportion, around 44 per cent, of the recipients of financial help from family members told the Bank of Scotland that they feel guilty about their borrowing.
The research also uncovered something of a discrepancy in terms of perception and expectations of repayments, with 21 per cent of lenders not expecting to be paid back but only 9 per cent of borrowers expecting never to repay whatever amounts they owe to their family members.
Of the Scots who have made loans to their children, many are aged over 65 and fall into a demographic category referred to as being ‘Baby Boomers’, with parents in this bracket accounting for 60 per cent of all lending by mothers and fathers across Scotland.
In 28 per cent of cases, money-lending parents indicated to researchers that they were concerned about the ability of their children to buy their first homes, with contributions towards housing deposits now a common reason for borrowing between generations.
“It’s great to see Scottish families being in a position to help each other out financially, especially for major life events like buying a new home,” said Nicola Noble, mortgage director and the Bank of Scotland.
“It’s also not surprising that baby boomers are playing such a major part in this. This generation is the wealthiest of all the generations,” she pointed out.
Recent changes to the law have meant that Scotland’s over 50s now have much freer access to their pension pots and this is understood to have contributed significantly to a rise in the amounts of money being lent within families throughout the country.
If you live in Scotland and you are struggling to cope with your personal debts then Scotland Debt Solutions can help. Contact one of our experts directly to arrange a free and confidential consultation.
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