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Published: 21/11/2017
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The Bank of Mum and Dad has long been drawn upon when the time comes to buy that all-important first home, but it looks as though it may be starting to wind down, with new research revealing that 34% of people say they have not and do not intend to offer financial support to their children to help them get on the property ladder.

No longer open for business

The research, from Royal London, highlights the financial difficulties that can persist across the generations, with many simply not able to offer the kind of assistance that they once could. The survey found that people living in the East Midlands were least likely to offer support to their offspring, with 40% of respondents saying they had not, and did not intend to, offer financial assistance, followed by those in the North East (39%) and North West (37%).

Parents in London were most likely to help, with 39% saying they either had or intended to help their children with a property purchase, followed by those in the South West and Yorkshire & the Humber (33% and 32% respectively). Of those who planned to or had already helped, 37% expected the amount provided to be less than £10,000, while for 28% the sum was between £10,000 and £20,000.

However, a particularly generous 11% said that they had or expected to provide more than £50,000 in financial support, showing that many still want to help cash-strapped family members – and those who do are willing to gift a significant amount. Yet it may not be a gift outright; while 57% of respondents said that the money doesn't need to be repaid, 27% said that it should be seen as an advance on inheritance, and 15% viewed it as more of a loan and expected the money to be paid back.

"The rising phenomenon of the Bank of Mum and Dad has received much publicity, but the findings make clear that not all parents have, or are willing, to offer financial support to children," said Royal London personal finance specialist Helen Morrissey.

"There are several reasons for this. House prices in areas such as the North West and East Midlands are much lower than in areas such as London, so it may be the case that parents and grandparents feel their family members do not need their support as much as in other areas of the UK.

"It may also be the case that these people have other demands on their money and cannot simply hand it over. Anyone looking to hand over money to help a loved one needs to ensure they take their own future needs into account before doing so as they do not want to leave themselves short of money at a later date."


While first-time buyers may be cash-strapped and finding it difficult to secure that first mortgage, parents aren't always in a position to help – and those who are may need to be more creative in how they fund their offspring's purchase. For example, some people may choose to use some of the tax-free cash they can withdraw from their pension as a form of early inheritance, while others may dip into their own savings or even look to equity release to give themselves and their children a cash boost, but as Helen says, any one of those decisions will require careful consideration to ensure their own finances are secure.

That means seeking professional advice is a must, ideally through an independent financial adviser, to ensure you won't be jeopardising your own financial future for the sake of getting your children on the property ladder. That way, even if the Bank of Mum and Dad remains open, you'll be able to draw on it yourself as well.

What next?

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