Parents turn to 'Bank of Son and Daughter'

Adults are giving their parents £11 billion, with a third of children's cash going towards paying off debts.

Research by Scottish Widows shows 13 per cent of those helping their parents financially have given cash five times or more.

On average children are giving their parents £6,500.

A third of cash goes towards paying debts, 15 per cent to buying a car and 14 per cent to help with day-to-day living expenses.

Anne Young, savings expert at Scottish Widows, said: "It's obvious that parents have felt the pinch as a result of being 'sapped' for thousands of pounds from their adult children, and are now turning the tables on them and ‘sapping back'.

"As over a third of parents planned to use the money they handed out to their children for their own retirement, they are finding that they are missing the money in their later years.

"I do expect the trend of parents having to go back to their children for money to increase in the future."

However, children remain ahead of the deal – with the Bank of Mum and Dad providing loans of £12,610 on average.

While 6.85 per cent of children have given to parents, 21.7 per cent of parents have given cash and loans to children

The rise in people turning to family for help is being seen as a side effect of the credit crunch – as securing a loan from banks gets harder.

"It seems that although people could well be tightening the purse strings at a time when the credit crunch could affect finances, families have to resort to helping each other out," said Ms Young.

"The amount of money given or loaned by parents and the number of children 'sapping' savings have both increased in the last year, to the extent that the overall Sap Fund of children from their parents' savings is well in excess of £60 billion.

"That's a significant amount, and the glaring hole in parents' finances will need to be replaced somehow, whether by sapping funds back from their children or by other means!"

Daniel Barnes