Have you heard of the 'bank of Mum and Dad'? It's a growing phenomenon during the recession, as adult children turn to their parents for financial help to make ends meet. Now, according to the Daily Mail, grandmas and granddads are helping out their adult children and grandchildren too.
According to the report, over the first six months of this year around £424 million of money was freed up with equity release, according to the Equity Release Council. 31% who released equity said they did it to help out their loved ones financially. People are generally taking out smaller sums over longer periods compared with the boom years, and may be using the money to supplement their own incomes too.
It's reported that grandparents are releasing equity to help their kids buy a home, since it's very difficult to find an affordable mortgage at the moment without a large deposit. Since university fees were raised to up to £9,000 per year, would-be students are turning to the bank of Grandma and Granddad too.
The Director General of Saga, Dr Ros Altmann, believes grandparents are helping out families because they're living longer and children must wait longer to inherit. She mused: "The last thing you want as a grandparent is for your children and grandchildren to be thinking, "When is granny going to pop off so I can get my hands on the house?"
A spokesperson for thinkbanking commented: "If you are short on money, family might be the first place you turn. After all, the rate of interest should be much lower than you'd find at the bank, and there might be less pressure to repay on time. However, before borrowing from your family, you need to be sure that you can afford the repayments to avoid a family disagreement."