Is the “Bank of Mum and Dad” Becoming Unsustainable?

Do you feel guilty about not being able to do more?

While it is well known that the “Bank of Mum and Dad” facilitates many people’s first steps onto the housing ladder, a recent survey reveals the significant emotional and financial strain this support places on families in today’s Britain. Parents with adult children recognise the importance of homeownership but are overwhelmingly worried, wanting to help more and feeling guilty they cannot.

Beyond the emotional burden, an alarming picture of the impact on older parents’ lives is emerging. The survey indicates many people are concerned that assisting their children may leave them financially strained. More than half of homeowners with adult children have either helped or expect to provide financial assistance for purchasing a home.

Emotional and financial implications

What are the broader implications of this trend? Do you feel guilty about not being able to do more? And what are the potential avenues through which you can assist your grown children in getting onto the property ladder? Home-owning parents are increasingly anxious about the prospects of their adult children, who do not currently own a home, being able to purchase the property.

The latest findings underscore that parents are crucial in helping their children gain a foothold on the housing ladder. Amongst this group, 59% worry about their children’s chances of owning a home in the future. Specifically, half of the parents with adult children who do not yet own a home want to provide more financial support.

Guilt and expectations

Additionally, a quarter of these parents feel a palpable sense of guilt regarding the level of support they can offer. Among home-owning parents with adult children who do not yet own a home, 59% are concerned about their children’s chances of future homeownership, 50% wish they could provide more financial aid, and 25% experience guilt over their inability to offer more substantial support.

More than half (54%) of parents with adult children over 18 have assisted or anticipated assisting their children with financial support for home purchases. However, not all parents can afford to give a deposit as a gift to help their children save for their first home, necessitating various forms of financial assistance.

Diverse forms of assistance

Whether it involves acting as a guarantor on a mortgage or allowing their adult children to live rent-free while they save, our data illustrates precisely how parents have or plan to provide financial support. The majority of parents (56%) expect this assistance to have a direct impact on their own financial situation.

Among those who foresee supporting their children, 28% indicate that this will require dipping into savings or investments. This leaves 13% concerned they won’t have adequate funds for the long term and 10% worried they might lack sufficient resources should they need long-term care.

Long-Term Consequences

A substantial 9% of parents providing support anticipate needing to work longer and delay retirement, while a similar proportion (9%) believe they may need to downsize their home. These are the sacrifices parents are willing to make to secure their children’s future.

Ready to discuss mortgages?

Are you looking to support your adult children on their path to homeownership? Our team of mortgage experts is here to provide all the information and guidance you need. Don’t hesitate to contact us—we’re dedicated to helping you make well-informed decisions. To discover more about how we can help you – speak to our team here.

Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. 

Author:
Jamie Roberts
Mortgage Adviser
CONTACT

Related Articles

The Rise of Joint Borrower Sole Proprietor Mortgages for Supporting Children Get on the Property Ladder

An increasingly popular solution to supporting your children’s future As the cost of living continues to rise and the prospect of homeownership becomes increasingly elusive for many young people, parents are stepping up to provide a helping hand. One innovative...

Read More

Lifetime mortgages: Why grandparents are becoming the new bank of mum and dad

Unlocking net worth tied up in bricks and mortar can help a new generation get on the property ladder, writes Stephen Savill With inflation staying stubbornly high, the threat of more interest rate rises on the horizon and food prices and other expenses rocketing, the...

Read More

Concessionary Purchases – A Strategic Approach to Inheritance Tax Planning

It is never too early to think about planning for the future of your wealth. If you own a property and are exploring options to pass it on to your children or grandchildren while minimising their inheritance tax (IHT) liability, a concessionary purchase might be...

Read More

The Rise of Joint Borrower Sole Proprietor Mortgages for Supporting Children Get on the Property Ladder

An increasingly popular solution to supporting your children’s future As the cost of living continues to rise and the prospect of homeownership becomes increasingly elusive for many young people, parents are stepping up to provide a helping hand. One innovative...

Read More

Lifetime mortgages: Why grandparents are becoming the new bank of mum and dad

Unlocking net worth tied up in bricks and mortar can help a new generation get on the property ladder, writes Stephen Savill With inflation staying stubbornly high, the threat of more interest rate rises on the horizon and food prices and other expenses rocketing, the...

Read More

Concessionary Purchases – A Strategic Approach to Inheritance Tax Planning

It is never too early to think about planning for the future of your wealth. If you own a property and are exploring options to pass it on to your children or grandchildren while minimising their inheritance tax (IHT) liability, a concessionary purchase might be...

Read More
}