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Four million parents to shell out on kids' new homes reveals unbiased.co.uk

• 76% of parents who have helped do not expect any money lent to be repaid
• 1 in 8 parents have already, or are expecting, to ‘lend’ at least 20,000
• Growing number of parents acting as guarantors
• Visit www.unbiased.co.uk to find a mortgage IFA

Research by unbiased.co.uk*, the organisation promoting the benefits of independent financial advice, has revealed that almost four million parents (38%) across Britain have either stumped up cash to help their children with a property purchase or intend to do so in the future. A quarter (25%) of these parents are contributing between 1,000 and 6,000, however 13% provide at least a whopping 20,000 in financial support. Furthermore, more than three quarters (76%) don’t expect the money ‘lent’ to be repaid.

Rather than children expecting a handout, the research also indicates that it is parents who are happy to put their hands in their pockets. Only 14% of 18 to 29 year olds are expecting their parents to stump up the cash for the deposit on their home, compared to the 40% of parents who intend to do so. Whilst half (55%) of children knew a parental loan was a possibility, one third (36%) were taken by surprise by their parents’ offer.

One in four (40%) parents would like to help their children purchase a property but feel they can’t afford to. Many parents choose to help in other ways and currently one in eight parents provide support by acting as the guarantor on the mortgage, with a growing number (36%) expecting to do so in the future.

Almost two thirds (60%) of parents intend to help out using long term savings, with one in ten relying on inheritance to provide the money. They expect their financial help to be used on a number of costly things that people can face when purchasing a home, including the initial deposit, stamp duty, solicitors’ fees and furnishing the new property.

If parents are willing to provide funding for their children, they must decide on how best to do this. They must not only consider which investments should be cashed in, but also ensure any loan is provided in a tax efficient way. Providing ‘gifts’ for your children to purchase a property may also have inheritance tax implications and it is imperative parents understand these. IFAs are the only advisers that look across a whole portfolio and provide specific IHT advice, and can therefore help parents make the most suitable decisions.

Karen Barrett of unbiased.co.uk comments: “Buying a home is one of the biggest financial decisions you will make. Even though our research shows parents are willing to help their children with this significant financial burden the need for advice when making such a great financial commitment is clear.

“Parents need to ensure they can afford to make a contribution and consider how is best to raise the money. With such a large number of parents not expecting their children to repay them, they also need to consider whether they can replenish the funds. Clearly both the parents and children would benefit from independent financial advice, so we urge both parties to visit an IFA when making a decision.” 

Following mortgage regulation in 2004 unbiased.co.uk has been promoting member IFAs specialising in mortgage advice as gold standard advisers, highlighting that a mortgage IFA is the only adviser who can offer whole of market advice across all products associated with mortgages (e.g. Life insurance or investment products).

Borrowers can find an independent financial adviser focussing on first time buyer mortgages in their local area at www.unbiased.co.uk and download a series of guides and fact sheets on the difficulties of getting onto the property ladder, including a mortgage guide.

For further information please contact:

David Elms	Laura Wood/Kate Horne
Chief Executive	Lansons Communications
Unbiased.co.uk	020 7294 3689 / 020 7566 9716
020 7833 3131

For expert comment or case studies from over 200 media-friendly IFAs, journalists should call unbiased.co.uk’s Media Services hotline on 020 7294 3682 or search online at www.unbiased.co.uk/media

1.      Independent Financial Adviser Promotion

Unbiased.co.uk is the consumer brand of IFA Promotion, the organisation established in 1989 to promote the value and accessibility of independent financial advice to the public. It represents around 9,000 firms of independent financial advisers across the UK, incorporating over 17,000 registered individuals. These individuals hold over 20,000 incremental qualifications which are each individually verified by the awarding body. IFA Promotion welcomes the prominent display of incremental qualifications and further developments into the credentials of independent financial advice. 

IFA Promotion is sponsored by 32 leading financial institutions, and in the past 12 months, over 600,000 consumers and businesses used unbiased.co.uk to find local independent financial advice.

IFA Promotion believes Independent financial advice should be:

         Affordable. The option to take independent financial advice should be available, by right, to all- not just the wealthiest in society.

         Convenient. IFAs should be available in the location of the consumer’s choice, wherever they live in the UK.

         Transparent. It must be clearly transparent to consumers who is able to offer independent financial advice and who is not.

2.      Independent Financial Adviser Promotion’s sponsors

Aberdeen Asset Management	London Mortgage Company
Abbey	Lincoln Financial Group
AEGON Scottish Equitable Plc	Mortgage Express
Alliance Trust	National Savings & Investments
AXA Life	NatWest Business Banking
Bright Grey	New Star Investment Funds
BUPA Health Services	Norwich Union Life
Canada Life Ltd	Prudential
The Children’s Mutual	Scottish Life
Clerical Medical Investment	Scottish Life International
Defaqto	Scottish Widows Plc
Friends Provident	Skandia UK Group
GE Life	Standard Life Assurance Company
GMAC Residential Funding	UnumProvident
INVESCO Fund Managers Ltd	Webline Limited
Legal & General	Zurich Intermediary Group

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