Dreams on hold: Parents put off retirement to help children
THE dream of retirement is moving out of reach for parents as they put post-employment plans on hold to help their struggling children get a foothold in the property market.
A new survey shows that Australian parents are willing to sacrifice their retirement, luxuries such as a holiday or new car, or dip into their savings to lend a helping hand to their children or even grandchildren.
The '2018 Generational Property Ladder Survey' by homeloans.com.au reveals almost two in three parents are currently making financial or personal sacrifices to help their children and/or grandchildren buy their own home.
And more than one in four parents willing to provide financial assistance are prepared to retire later than planned - a growing trend despite a growth in superannuation.
Homeloans.com.au head of marketing Will Keall said the survey results showed that parents were willing to put their dreams on hold to help their children achieve their own.
"It's commonly known how difficult it is for first-home buyers to get into the market, particularly in popular metro areas, and we're seeing parents are prepared to go the extra mile for their children or grandchildren," Keall said.
"To help with this, parents are doing what they can to help their children become first-home buyers, from cutting back on their own spending to going guarantor on a loan."
According to the survey, parents are willing to help their children out in several ways including giving money, providing an interest free loan, buying a home in partnership or letting the children return home to save for a downpayment.
"If parents are able to help financially by giving cash or going into partnership on a property, that is clearly the fastest way to help a first-home buyer onto a ladder," Keall said.
"However, providing support to help your child save, such as by allowing them to move into the family home temporarily, or acting as guarantor on a loan will also help them to own a home sooner.
"One idea for parents with adult children living at home could be to charge them board, and then invest the money to put towards a deposit.
"Not only does it give the kids a financial boost, it also helps them learn the discipline of saving."
The survey also found:
- 36% are willing to be a guarantor on a loan from a financial institution
- 32% are willing to purchase a home in partnership with their children
- 46% would let them move into the family home while saving for a deposit
- 26% of parents that are currently providing assistance have dipped into savings to do so
- 13% have set up a trust fund for their children
- 39% would sacrifice little luxuries like going to restaurants or movies