New research from Prudential has found that, on average, those who have lent money to their children or grandchildren are owed £12,700, and 11% of the Bank of Mum and Dad’s loans are for figures of more than £20,000.

The research also shows that in many cases the Bank of Mum and Dad doesn’t expect its loans to be repaid in full, with 44% parents who have lent money to their families admitting it is unlikely that they will ever see the full amount of money again.

68% of the more than 1,000 parents interviewed  have already loaned money to their families, or have definite plans to do so in the future, while the remaining 32% all hope to be in a position to act as their children’s preferred lender some time in the future.

Of those parents who are considering lending to their offspring in the future, many are also unsure they will get the money back – 37% think it is unlikely they will be repaid, while only just over a quarter (28%) expect to be repaid eventually if they are called on as a lender.

Stan Russell, a retirement income spokesperson at Prudential, said: “As a parent myself I completely understand that most of us who are in a position to do so would want to provide financial help to our children. But as our research shows, in many cases this financial support ends up being gifts from Mum and Dad rather than the loans from the Bank of Mum and Dad they start out as.

“These written-off loans risk making a long-term dent in the finances of parents, often at the stage in their lives when they would like their money to be invested for the future and working hard for them in a pension. If the choice is between providing loans to their children or continuing to contribute to a pension, many parents could benefit from a consultation with a professional financial adviser before making that decision.”