Quarter of parents say they expect to support their children into middle age

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The Independent Online

A quarter of couples expect to support their children financially through their 30s and into their 40s, according to research published today.

One in four gave grown-up offspring money for a car, and a fifth contributed towards the cost of a home. A third of parents helped towards a holiday for a middle-aged son or daughter, the survey, published by Lloyds TSB, found.

The UK Wealth Watch research found that many parents gave children over 40 a regular allowance or "pocket money" to help them through the difficult economic times.

Last week, research identified "kippers", (kids in parents' pockets eroding retirement savings). It revealed that more than a million parents had children living with them even though the offspring were approaching their 40th birthday. It said that parents spent an estimated £20.24bn a year to support their grown-up children.

The reports show the serious financial situation that many so-called "adult children" found themselves in. Their situation is leaving a dent in their parents' retirement savings. But despite the apparent growing dependency of children in their 30s and 40s, most parents said that they expected their children would be wealthier than them in the end.

The Wealth Watch study found that 56 per cent of Britons were confident that their children would eventually have more money than they did, while 10 per cent thought that their offspring would be worse off.

Wealthier parents were the most keen to support their children into middle age, but were less willing to give smaller, one-off gifts of money.

Over a third of parents who earned more than £100,000 were happy to buy grown-up children homes, cars and holidays and to assist with day-to-day living costs through allowances.

This compared to a quarter of less well-off parents, who were twice as likely to cut the financial ties before their children were 21. But less than two thirds of the rich said that they gave their children one-off cash sums compared to nearly 80 per cent of the rest of the population.

Catherine Battershill, a spokeswoman for Lloyds TSB, said that high property prices were the main cause of the greater dependence of middle-aged children.

She said: "Most parents are very keen to help their children get a foot on the property ladder, and with the current state of the housing market this is often very difficult without some extra cash from mum and dad.

"As a result, parents today are expecting to play an active financial role in their children's lives for longer. Many are helping them into their 40s, and quite a few well beyond that."

The cost of the average home in the UK is £132,000, according to the Nationwide building society.

The study also revealed widespread confusion among parents over inheritance taxes and duty on gifts. It found that less than half of parents were aware that up to £3,000 could be gifted to their children tax-free, while nearly a quarter were unaware of the inheritance tax rate of 40 per cent.

HAPPY FAMILY: HOUSE PRICES KEEP DAUGHTER AT HOME

By Tim Reynolds

Sandra Saltern cannot afford to buy a home on her salary of £18,000 a year. She says the cost of renting would leave her almost nothing to spare.

Instead, the 32-year-old public relations executive lives at home with her mother Yvonne, 60, and father David, 58, a business development consultant, in their four-bedroom home in Wantage, Oxfordshire.

She believes her parents' help saves her £450 a month in rent and bills, which she is saving for a deposit. Ms Saltern also borrowed £2,000 from her father to pay for a car, although she is repaying it.

The only time she has lived away from home was when she studied at Southampton Institute, which left her with debts of £10,000. She said: "The high cost of property has made it very difficult for many in my generation.If I rented it would be impossible to save any money at all, so I'm left with my folks."

The situation has its advantages: her mother does most of her washing and cooking, and she gets on well with her parents. But, Ms Saltern adds: "It is a horrific thought that at 40 I could still be relying on my parents. I hope it doesn't happen to me, though with the way things are, it isn't impossible."

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