British consumers must become more disciplined savers to “ensure the bank of mum and dad is solvent and free of debt”, James Hay’s Ian Linden has said.
Mr Linden warned younger generations were occupying the “bottom rungs” of the housing ladder and struggling to afford to buy property.
He said: “We have to accept that for most of us our property value cannot continue to rise unchecked, and there will have to be a period of stagnation or even significant reductions in house prices if we are to reset the affordability criteria and reduce the burden on the younger generation.”
Mr Linden, technical support manager of Salisbury-based retirement planning platform James Hay Partnership – part of the Dublin-based IFG Group, added: “If we are not prepared to do this, then for those of a certain age we have to become more disciplined savers to ensure the bank of mum and dad is solvent and free of debt for the long-term needs of our children.”
Mr Linden said this discipline should encompass all forms of savings, such as cash, general investment accounts, Isas and pensions.
Adviser view
Geoff Cavanagh, financial planner for Newcastle-based Tait Walker Wealth Management, said: “It’s a challenging balancing act for young savers between paying off ever larger student loans, pulling together a house deposit in the short term and then thinking about pension provision in the longer term.”
