Eight in ten (79%) middle class parents are helping support their adult children financially, and one in four are helping with mortgage payments specifically,
This is according to the latest Saltus Wealth Index Report.
The average rate for a two-year fixed deal recently surpassed 6% which has pushed the average repayment on a 25-year £200k mortgage up £383.50 in just two years.
Over a two-year period, that amounts to an extra cost of £9,204; many households are struggling to cover that extra cost and are increasingly turning to ‘The Bank of Mum and Dad’ for help.
The Saltus report surveyed more than 2,000 people in the UK with assets, including property of £250,000 or more. In addition to one in four parents helping with the mortgage, the report also shows a further 20% are helping with rent payments.
According to Saltus four in ten (39%) of all respondents say rising mortgage rates are already putting a strain on their own cash flow, and a further 47% say further rate rises will cause issues.
Nevertheless, they are still willing to provide support to their children; 22% have reduced their own pension contributions, 20% have tapped into housing equity, and 20% have sold another asset in order to help.
Saltus partner Mike Stimpson comments: “Traditionally, parents have helped out their children with deposits on houses, and other investments that grow with them, but now, we’re increasingly seeing clients forced to bring those investments forward to help their children with everyday costs such as mortgages and household bills.”
