Parents using savings 'to get children on housing ladder'

Many parents are raiding their savings accounts to help their children take advantage of the housing market slump, it has been reported.

According to Lloyds TSB, some 23 per cent of parents have, or plan to use their savings to help purchase a home for their offspring.

However, just eight per cent of respondents said they already have a pot large enough to help each of their children, with 14 per cent saying they will need to keep on saving.

Some 20 per cent claimed they were willing to provide financial assistance, but their children would also have to contribute to the deposit themselves.

Stephen Noakes, commercial director of mortgages at Lloyds TSB, said the bank could help out parents wishing to use their savings in this way,

He added: "Lloyds TSB's Lend a Hand mortgage lets parents use their savings without actually having to write their children the cheque.

"Their deposit is held in a savings account paying a competitive rate of interest and, after three years, they are free to use their savings again as they wish, maybe to help their next child buy their first home."

Earlier this month, the Nationwide Savings Index indicated that 21 per cent of consumers plan to increase the amount they save during the next six months.

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2009-10-26 14:06:21 © Moneyextra.com