AN exclusive survey, carried out by YouGov on behalf of Brewin Dolphin, shows parents of today’s under-18s in the North are planning to delay retirement, compromise their lifestyle and dip into their hard earned pension pots and home equity to give their children and grandchildren a step up on the ladder.

The survey shows 36 per cent of all parents in the North believe that in their lifetime they will have to contribute between £25,000 and £100,000 per child in order to cover home deposits, university fees and other living expenses.

At Brewin Dolphin, our financial planners are finding increasing numbers of anxious clients facing demands from their children who cannot get onto the property ladder, or need financial help with other areas of their lives.

The pressure is such that we’re also seeing the emergence of second generation funding from the ‘Bank of Nan and Grandad.’

The figures show the pressure on families is far higher than it was even a few years ago, with 40 per cent of parents of today’s under-18s believing they will have to compromise their lifestyles because of the demands of their children, compared with just 26 per cent of parents with children who have already reached adulthood.

Parents who have already given money to their adult children have mainly focused on housing, and education, as well as buying their child’s first car.

The statistics show 38 per cent of parents have needed to assist their children with housing costs, mainly due to rocketing house prices, stringent new mortgage rules and rent increases.

The expectation of the support parents of younger children - currently under 18 - will need to give is far higher, as is the expected effect on their lifestyles.

Of those surveyed, 25 per cent with at least one child under eighteen expect to retire later due to financial demands from their children, with some considering downsizing their home to release equity as a result.

While many parents are willing to give, it’s important this is not done at the expense of their own retirement planning, particularly given the current uncertainty around annuities and income generation.

People in their 30s and 40s will now generally not enjoy the pension pots their parents did, and this survey shows a worrying trend towards parents needing to choose between helping their children and sacrificing their retirement savings.

It’s therefore important to take expert financial planning advice and consider the future before signing cheques to your kids, however well intentioned.

Food for thought, perhaps, is to get children interested in finances from a much younger age - such as how to prioritise spending between needs and wants, setting them savings challenges and trying to teach them about managing their own finances and setting themselves a budget.

This can be a good first step towards financial independence.

If they can master how to live within their means and not rack up debt, they’re more likely to grow up to be financially responsible adults, able to save, even invest, and, ultimately, to rely less on the ‘Bank of Mum and Dad.’

Jo Jackson is head of financial planning at Brewin Dolphin, in Newcastle. Past performance is not an indication of future performance. The value of any investment and any income can fall and you may get back less than you invested. No investment is suitable for all people and should you have any doubts you should consult an authorised financial adviser. The information contained in this article has been taken from public sources and is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness. The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin Ltd. No director, representative or employee of Brewin Dolphin Ltd accepts liability for any direct or consequential loss arising from the use of this document or its contents.