Parents are likely to double financial support for children if repayment is guaranteed

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Parents looking to support their children financially are likely to double the amount awarded if it is structured as a loan so that repayment is guaranteed.

A study by Generation Home, which surveyed 1,003 parents aged 33 and over, found parents would part with an average of £13,088 to support their children, but that amount would rise to £22,093 if the money was secured in the form of a loan.

The survey found that one in 10 people would donate between £10,000 and £50,000, but that doubled to one in five if they knew it was going to be paid back.

More than two-thirds of parents, 67%, said they would help financially and 26% said they were happy to give money with no agreement on how it was spent.

Just under half of parents, 46%, said they would give money to contribute towards a child’s first home, compared to 10% for higher education, marriage or a car.

However, more than a third, 37%, said they wanted to provide financial support but were unable to, citing increased pressure from daily bills and the cost of living crisis. .

Sophia Guy-White (Photo)co-founder of Generation Home, said, “With so many factors stacked against first-time buyers against the backdrop of an even tougher financial climate this year, it’s easy to think the doors to the real estate market are completely shut.”

She said Generation Home was committed to helping parents who wanted to financially support their children but feared the uncertainty of giving large sums for a deposit.

Guy-White explained that his Generation Home deal turned deposit givers into deposit boosters through an interest-free loan.

She said it took away “awkward conversations” around financial deals and helped more young people get on the property ladder, and everyone involved in the deal would be protected.

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