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Bank of Mum and Dad: Where do You Stand in the Dance of Generations?

bank of mum and dad

You may think that John and I are an ordinary couple, going around our everyday endeavours and trying to live life as best as we can. You’d be wrong: we have been a quasi-bank – or the bank of mum and dad – for well over a decade now.

You see, when our grown up sons graduated high school they lived at home; we supported them.

We continued to support grown-up children when they went to university. We didn’t manage to pay for everything but even what we managed to contribute minimised their student loans.

We did it without resentment or a second thought. We supported our grown up sons (in my case step-sons) just like my dad supported me through university.

Can you guess the main reason people support grown-children?

No, it isn’t because we have to (this is for my readers who are on the receiving end of the bank of mum and dad).

It isn’t because we molly-coddle our middle-class children (this is for my readers who are at the giving end of the bank of mum and dad).

I believe it is because, as parents, it is our most base desire to see them succeed; and being happy.

What troubles me is that our grown-up sons are in their early 30s now, well out of university, working and…

…we are still supporting them. No it isn’t a regular arrangement. Still, the ad-hoc muted cried for money happen often enough. There is also my fear that they don’t eat enough (or well), that what they wear mostly looks like the rejects of a tinker, that…

Well, you get it.

My fears are not without foundation. Yes, both sons work. But they are by far not well paid. Our middle son is in retail and he, even in his new job with one of the last decent employers left in the UK, is on 15 hours per week contract. This, at minimum wage, doesn’t go far.

In brief, we have to support our grown-up sons financially so they can survive. How about thriving? How about getting out of renting and not having to choose between food and heat (people faced with this choice often choose drink and cigarettes, anyway).

More worryingly, it looks like we are not alone.

According to the BBC the bank of mum and dad help finance 25% of all mortgages in the UK at the moment. The average amount that parents contribute is £17,500 per child.

A separate study found that two in five baby boomers – these are the people who have children in their 30s now – expect to have to help their children get on the property ladder; one in four expect to have to help their children with their rent; and one in three, plan to cover the cost of their children living at home.

(Note: This research was supported by ziffit.com and they polled 2040 people across the UK. I have not seem the detailed methodology of the study but thought its findings interesting.)

Now this is scary.

For the parents who have to support their grown-up children, it is really bad news because this messes up big time with their retirement. This is affecting us, parents, in at least three ways:

#1. We are using money we would otherwise be putting away in pension accounts to keep our grown-up children;

#2. We are the generation living through immense changes in labour markets (fewer, very different jobs) and the breakdown of the social security system.

#3. We are sacrificing the savings and pension pots we have (apparently in London, half of the household net wealth of families, excluding housing, is going towards helping their offspring get on the housing ladder).

 It is not good news for the grown-up children we support either. You see, I believe that there comes a day when people have to become independent and start their own life. I know, that when our grown-up sons lived with us they didn’t have a life.

Worst of all, the contract between children and parents that existed for millennia is broken. It used to be that generation live together, they look out for each other and when the time comes, after each other. This time is long gone.

We help our grown-up children financially thus making our lot in old age much, much harder.

And here is the problem:

We support our grown-up children hurting our retirement and, eventually, starting to resent it.

Our children accept our financial help – they mostly believe that they don’t have a choice, really – thus never becoming properly independent and, eventually, they start to resent it.

Resentment breeds conflict and unhappiness.

For the life of me, I cannot find my way through this ‘dance’ of generations. I just hope that it is not going to turn into a battle!

Do you help your grown-up offspring? Or are you the ones who get help? How do you feel about it?

photo credit: Sumatran tiger cubs via photopin (license)

12 thoughts on “Bank of Mum and Dad: Where do You Stand in the Dance of Generations?”

  1. This is an interesting read for me. My kids are relatively small but I must confess my parents supported me financially until I was out of university before I found my own independence. Their support I believe kept me far away from so many relevant debts I would have dabbled into without their assistance.

    • @Esther: What interests me is how did you make the transition, Esther? How did you become ‘independent’? I remember the relationship reversing and from my dad helping me (all through university and a PhD) to me starting to help my parents financially. Looking at my sons, however, this reversal is not forthcoming.

  2. I’ve received very little financial help. I have one parent who is quite wealthy and the other who is not (they are divorced). I have friends who have received financial help from family and some are very, very appreciative and help their parents out quite a bit or have made a point of paying them back. I have other friends who have taken it for granted. I think a lot of how the child perceives the help depends on how long the parents give it. The longer it happens the more challenging it is for the child to stand on their own two feet. It’s a delicate dance because parents work hard with the idea of making life easier for their children. Knowing when to pull back is hard to figure out. Depends on the child.

    • @Michelle: Thanks, Michelle. Very wise words that I’d need to consider. It seems to me that apart from preventing our children to become independent the longer we help them financially, we also run into the problem that they start resenting the help because it threatens their independence.

  3. What a great article Maria. I became financially independent when I was 19 as both parents died..leaving no inheritance. Long story there. I have always felt strange about kids who continue to live off parents…all because of my circumstances. I work really hard to get my kids to understand money so they can become financially independent as soon as possible. Love this post. Shared on twitter. Xx

    • @Lynn: Thanks and sorry to hear about your parents. Do you have any ideas to share how to stop this? What concerns me is that many people from my generation are in the same situation and we have no idea how to make our children try. It is like they’ve given up on life before even starting to live it.

  4. Hi Maria, whilst bringing the children up, we had next to nothing and they are used to going without. Now as adults, they do everything for themselves, never came home once left and never came back and asked for anything. They are thrifty, buy second hand, house share, work extra hours, save up, go without and help out family members. We help in kind, by flat painting, keeping our eyes open for second hand – currently trying to find a vacuum for our son, up cycling stuff for them and giving them a small cash gift each birthday. Parents can pay what they like but I wanted mine to be independent and self supporting so they had to go without to learn that.

    • @Frugal Queen: Well done on bringing up your kids to be like that. In our case, it is different with different ‘crops’ of kids. My step-sons grew up not knowing the link between work, pay and cash machine – remember having to explain that it is not as simple as just going to take money out of the cash machine. Interestingly, they are very thrifty but in a rather uncontrolled way. What I mean is that they’ll deny themselves and then, of course, waste money. They need to read some blogs, I think :). Our third son, grew up when we were paying off the debt and has a very different approach to money – he grew up with the ERR money management strategy :).

  5. Such a difficult topic. I have discussed the issue of helping your kids if they are in debt on my site – but the question of helping them with a house purchase is equally difficult!

    I see too many people planning to take money out of there pensions to give their kids a deposit – that’s fine if you are basically rich, but otherwise you should think ling and hard about this. Your kids can work harder / longer / get mortgages – when you are retired you can’t!

    I’m less concerned about whether to much help does kids any good. In most ways we are the lucky generation, no student fees, more job security, better pensions. Our kids are in a very tough world…

    • @Sara: Can’t agree more. Our primary responsibility should be to ensure that we have enough to live on when we can’t or don’t want to work any longer. Ironically, this is the best thing we could do for our children as well. As to our kids living in a tough world, I was thinking the other day that every generation lives in a tough world – it is just that the problems we have to deal with are different.

  6. Hey Maria,

    I’m of the opinion parents need to be a bit strict and take the risk of hurting some feelings for a short while by telling their children to make it on their own. You can’t be helping them forever.

    When I finished school my parents left the country leaving me to get on with it. It’s amazing how resilient you become when you don’t have a choice.

    While it will undoubtably be upsetting and difficult, they’re better off in the long run.

    With best wishes,

    • @Tom: I’d agree. At the moment the need for support goes beyond feelings, though. Many younf people find themselves living on the street because of the ‘austerity’ measures of the job centres. Do you know they stopped our middle son’t JSA at one point because they wanted prrof that he shares house with his brother and not his lover? How absurd can things become when Job Centre staff get rewarded for dishing out penalties? There were several occasions where without help from family (including his brother) our middle son would have become homeless. Once you reach that level, it’s very hard to get back up. This is why I velieve it is such a fine line to walk.


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