- The Bank of Mum & Dad
- £17 billion is gifted, or informally loaned each year, of which over half is used for property purchase or improvement (The Institute of Fiscal Studies http://www.ifs.org.uk).
- Virtually all money transfers come from parents aged over 50 to children in their late 20s and early 30s. The average gift for property purchase or improvement is over £20,000.
- The age children leave home is generally between 25 and 27 years, and the average age to purchase a first property is 33. Over 22.4% of families in the UK include one or more adult children.
- Research by Legal and General indicates that without the financial help of family and friends, over 70% of prospective home buyers would have to delay their property purchase plans, by an average of 4 years. Source: Dataloft, The Institute of Fiscal Studies, Legal and General, Census 2021
The Bank of Mum & Dad has been a phrase that has been around for ages. However, it is only in recent years that it has become a phrase that we seem to hear almost every day!
So with over £8.5bn being put towards property and home improvements, we do wonder what the other £8.4bn is used for??
However, virtually all the money came from parents aged over 50. This shows that this happens when Mum & Dad are mortgage free. It could of course also happen when their mortgage is small.
The average gift comes in at over £20,000, and the average UK property price being £288,000. Therefore it would seem that the gift is virtually covering the deposit in many cases.
Should children stay at home longer?
With children leaving home aged 25-27, and the average age when money gifted being 33, a question is posed!
If children stayed at home an extra 4-5 years, could they not save up more money and not rely on Mum & Dad? It’s just a thought. Nothing more, nothing less! With the rental market so strong, and rents only going one way. Staying at home a little longer COULD make life easy on their parents wallets & purses. Either way, it is thought provoking!
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