Debt is a major worry for many grandparents

As the British economy takes a battering and the future of the euro looks less certain than ever, debt is becoming a major issue for households.

Pe…

As the British economy takes a battering and the future of the euro looks less certain than ever, debt is becoming a major issue for households.

People are struggling to make ends meet as the cost of living rises and real-term wages fall.

The problem is so acute that MoneySupermarket.com estimates that 1.7 million grandparents are being pushed into debt because they are bailing out their children and grandchildren financially.

According to the price comparison website, more than half of those who provide assistance to children over the age of 18 are putting their own finances in jeopardy.

In fact, the average amount of unsecured debt held by grandparents and parents stands at £3,513.

Kevin Mountford, head of banking at MoneySupermarket.com said: "Many parents and grandparents who provide monetary help are finding their own financial situation being pushed to the limit."

He claimed that many parents and grandparents were actually taking out finance in order to keep their offspring afloat.

"Taking out additional borrowing to support family members is an honourable thing to do but people need to consider how they will repay the debt," Mr Mountford concluded.

A quarter of grandparents surveyed said they were helping out their grandchildren and almost a third of parents are doing the same.

It seems that the majority of cash from parents and grandparents is being used to help with the general cost of living, which has risen dramatically in the past few years.

The funding of education and helping children clear their debts are other major areas in which parents and grandparents are helping out.

Just this week, the Trades Union Congress claimed that the nation's poorest households were the worst hit by falling levels of disposable income.

The organisation's general secretary Brendan Barber noted that month-on-month people have been getting poorer thanks to the soaring cost of food and utility bills.

Posted by Amy White

Tell others:

shortlink