The “Bank of Mum and Dad” in Scotland lent nearly one-third (29%) more money to their children in 2016, compared with the year before, a Bank of Scotland (BoS) study found.
The bank’s latest How Scotland Lives research revealed parents forked out on average £3,987.22 to help their children financially last year, rising from £3,079.91 in 2015.
There was an increase in children aged 18-24 taking a loan, rising from a quarter in 2015 to more than one-third (34%).
By contrast, fewer children aged 25-34 borrowed from their parents last year – down from nearly two-fifths (39%) in 2015 to one-third.
More Glaswegians (28%) borrowed money from parents than any other region in 2016, followed by Aberdeen (24%).
While there was no change to the number of children helped by their parents last year (18% in both 2015 and 2016), there was a dramatic difference in the size of loans.
The number of parents lending their children more than £10,000 was up by nearly a quarter (23%).
But it was only parents aged 45 and over lending such high amounts. The percentage of parents aged 45-54 years funding their children more than £10,000 trebled last year to 6%, while for the 55 and overs the rate increased by nearly one-third to 21%.
It seems these same age groups have the deepest pockets as they were the only ones lending children between £3,001 and £10,000.
One-third more parents lent their children between £5,001 and £10,000 last year, while the percentage of those aged 45-54 doing so doubled to 8%.
Nearly one-fifth (18%) more parents aged 55 and over lent their children between £5,001 and £10,000 in 2016, BoS said.
More than double the number of parents aged 55 and over lent their children between £3,001 and £5,000, increasing from 7% to 15%.
But there was a marked decrease in parents aged 45-54 lending between £3,001 and £5,000, dropping from 11% in 2015 to only 3% in 2016.
The 45-54 age group wasn’t totally off the hook last year though as 11% lent their children between £2,001 and £3,000 – a substantial increase on the 3% who did so in 2015.
BoS said its study also showed Scots feeling increasingly guilty about borrowing from family but fewer expecting to pay it back
Half of those who borrowed money from family last year felt guilty about doing so, up from 44% in 2015.
Parents aged 45-54 (58%) felt most guilty about borrowing from family during 2016.
Despite these increased feelings of guilt, fewer children (34%) expected to have to pay money back last year – down from 40% in 2015.
Only 24% of last year’s 18-24-year-olds expected to have to repay their “loans”, compared with 44% in 2015.
Rachel Bright, head of customer and change, BoS, said, “It’s interesting to see the shift in size of loan being given to children by Bank of Mum and Dad over the year.
“Fewer parents are lending smaller amounts of up to £1,000, yet more are now providing quite substantial loans to children of £3,000 or more.
“It’s very possible that this is parents helping their children with education costs or getting on the property ladder.
“Although more Scots are now feeling guilty about borrowing money from family members, there has been a marked rise in the number who don’t expect to have to pay money back – up by a third over the year.
“Whether the loan is expected to be paid back or it’s considered early inheritance, it’s worth setting out the principles of the agreement early to avoid any family tension down the line.”
The research was completed by YouGov and the findings are based on 2,007 online interviews with a representative sample of adults aged 18 and over living in Scotland.
