Scottish bank of mum and dad gives out over half a billion

This study, which looks at family debt, identified that the average Scot owes their parents £3,079. With 28 per cent concerned about their children’s ability to buy their own home, it is likely that most of this borrowing is going toward funding a deposit to purchase a new home.

The majority of people lending money to family members (52 per cent) were positive about this and indicated they were happy to help out. However, over a fifth (21 per cent) said that they don’t ever expect to be paid back.

Almost half of borrowers (44 per cent) feel guilty about borrowing money from family members. Despite this, almost a tenth (9 per cent) don’t ever expect to pay their family member back. High levels of family debt does not seem to have had a significant impact on family ties with only 8 per cent believing it has caused tension.

Over 65s make up the biggest share of ‘Bank of Mum and Dad’ lending, contributing over 60 per cent (£366m) to the £582m total. The findings show that over a quarter (26 per cent) of over 65’s are lending money to family members with the average loan to children totaling £4,022. A fifth (20 per cent) of loans to children are for amounts over £10,000.

There are a number of regional variances within the research:

Nicola Noble, Bank of Scotland, mortgage director, said: “It’s great to see Scottish families being in a position to help each other out financially, especially for major life events like buying a new home.

“It’s also not surprising that baby boomers are playing such a major part in this. This generation is the wealthiest of all the generations and with last year’s pension freedoms giving them even greater access to pension savings, they are very well placed to help their family out in times of need. Whilst many in this generation can provide short term financial help, they should also remember that life expectancy has increased, so will need funds to support a longer and more active life.

“Not all young people are able to access this type of support, so it’s important to highlight alternative options like saving using the Help to Buy ISA or purchasing a house through shared ownership.”