Bank of grandma and grandad helping families to pay off debts

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More than one third of over-65s have paid off debts of more than £2,000 for children or teenage grandchildren, researchers have discovered.

The nationwide study suggests older people are dipping into their savings to help their families deal with the rising cost of living.

It shows 35 per cent of over-65s have helped out their adult 
children or teenage grandchildren with signifcant cash sums, highlighting the continuing pressures on retirement income.

There is growing concern that people in this age group are making sacrifices to help other members of their families at a time in their life when they should be looking forward to taking it easy and when they would have hoped to have a stable income.

Experts have warned that the over-65s are particularly vulnerable to the high price of food, fuel and energy prices at a time when returns from their savings and pensions are being hit by low interest rates.

The research, by MetLife, an insurance and services group, found 17 per cent of the over-45s have helped out their teenage children – but the figures doubled when it came to the over-65s who are handling requests for help from their adult children as well as from teenage grandchildren.

In the 55 to 64-year-old age group the proportion who have bailed out children or teenage grandchildren for £2,000 or more was 26 per cent, the study has revealed.

MetLife’s managing director highlighted concerns that grandparents were risking their own financial security to help their children and grandchildren clear their debts.

Dominic Grinstead, managing director of UK MetLife, told The Yorkshire Post: “Helping out family is clearly important to many parents and grandparents and it appears that the requests for help don’t necessarily stop when you are retired.

“The worry is that grandparents are having to make sacrifices to help out and risking their own financial security to enable children and grandchildren to clear debts.

“Retirement income solutions need to be flexible enough to enable savers to cope with emergencies or financial shocks because it is guaranteed there will be surprises once you retire,” Mr Grinstead warned.

Previously concerns have been raised about high debt levels among the over-60s by a consumer credit advice charity.

There are fears that a burden is being put on this age group at a time when they should be considering their retirement and hoping that a sound financial future lies ahead of them after a lifetime of work.

Debt charity StepChange earlier warned: “The high levels of debt among the over-60s is very worrying, as people approach retirement most would hope that a sound financial future lies ahead of them, but significant levels of personal debt is a serious problem for some.”

The consumer credit advice charity said it was increasingly finding the over-60s have dependent children as people are having families later in life.

It also raised concerns that high unemployment rates for people under the age of 25, mean the over-60s are often having to continue supporting their children much later in life than previous generations, increasing the burden on the age group.

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