The average parent is apparently forgoing a pension pot of £38,500 in order to financially support each child who is 18 and over, says some recent research by Standard Life. The research finds that parents are supporting their children post 18 for expenses such as university costs, debts, weddings, house deposits and other general finances.
On average, parents estimate they will invest around £15,490 in each adult child. If this sum was invested into a pension instead, it could provide a pension pot of £38,500 in 20 years year’s time for a basic rate tax payer. And for a higher rate tax payer, it could provide a pension pot of £51,380.
Standard Life’s John Lawson commented:
“A parent’s desire to provide for their children even when they become young adults is increasingly coming at a huge cost to their own future financial security. Our research highlights the significant financial challenges facing parents, whether to secure their long term future or meet their family’s immediate needs. The high level of unemployment among young people can only be exacerbating the problem. “
Our Independent Financial Advisors at Enable know how parents can feel as if they have very little choice – so we want to make sure that whatever money you have to save for the future is working as hard as it can.