Sunday 7th of March 2010
Parents who are asked for money from their adult children to pay off debt may be struggling with unsecured borrowings themselves.
A new study by Scottish Widows has found that one in ten mums and dads who have lent their adult children and grandchildren cash have, as a result, increased their own amount of debt, something an individual voluntary arrangement (IVA) could help with.
But it does not just stop with lending money. Some generous parents have even remortgaged their property in order to help loved ones with their own finances.
However, it could be time that mums and dads started to think about their own monetary situation and asking some questions on IVAs could be one way to take the first step to more financial freedom.
Scottish Widows savings expert Iain McGowan says lending cash to loved ones will make parents vulnerable to "any unforeseeable circumstances such as salary cuts, but the extra handouts to their kids can also affect them in retirement, meaning they may have to work longer, or make their retirement savings stretch further".
Clearing debt now through an IVA could prepare mums and dads for a more financially stable future.
By Rachel Powell
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVAs may put an end to card worries
