By Elizabeth Gration, MacNaught Digital
We’ve all heard of the Bank of Mum and Dad. The only bank in the world which provides that ever so valuable financial support when you need it most, even if it does come alongside a muttered “Money doesn’t grow on trees, you know” comment every now and again.
But although the increasingly generous Bank of Mum and Dad has now been named the sixth largest lender, is it really the most popular form of family lending? Or do many parents now actually rely on financial support from their children?
To find out, the savings marketplace Raisin did some digging and asked 2,000 UK adults about their family lending habits. The survey found that Mum and Dad are not the only ones lending large sums of money to one another in UK families. Believe it or not, a staggering 44% of UK adults have lent their parents money at some point in the past.
How many people lend their parents money?
The study found that 1 in every 5 adults have given (not lent) one or both of their parents’ money to buy something they needed but were unable to afford themselves. This could be food, bills, debts, or other payments. It also revealed that 1 in 10 of us have helped our parents to pay for housing such as mortgage deposits and rent payments at some stage in the past.
So who is most likely to lend their parents money?
Now that we know how prevalent the Bank of Son and Daughter is in today’s society, let’s find out who these generous family lenders are in the UK.
Men are more likely to help their parents out of financial difficulties
When asked ‘Have you ever repaid your parents debts on at least one occasion?’ approximately 1 in 10 men said they have, whereas only around 1 in 20 women said they’ve done the same. This suggests that men are twice as likely to help with their parent’s financial struggles than women.
When asked ‘Have you ever been a financial guarantor for your Mum or Dad’ and ‘Have you ever contributed towards your parents’ mortgage repayments or rent?’ significantly more men than women said yes.
However, the study also found that more women than men worry about their Mum and Dad’s ability to afford retirement. 1 in 10 women feel this way, saying they’re currently worried about this. Whereas with men, just 1 in 15 said they feel the same way.
The younger we are, the more likely we are to support our parents financially
Interestingly, it seems that the older we become, the less likely we are to have lent or given money to our parents. The table below shows the percentage of UK adults who have lent their parents money at some point in the past.
|Age Group||% who have lent their parents money|
As the table above shows, almost three quarters of those aged 18 to 24 have lent their Mum and Dad money at some point. Although, just 10% of people in this age group feel that they are more comfortable financially than their parents, suggesting that the younger we are, the more open-handed we’re likely to be with our parents.
The tendency to help parents out with money struggles appears to be quite common amongst adults in the 18 to 24 age category, as a quarter of adults this age have been asked for this kind of help by their parents. However, parents are most likely to ask their slightly older (25-34-year-old) children to help out, as a third of people in this age have been asked to support their parents financially.
Which region helps parents out the most?
The fictitious Bank of Son and Daughter is clearly relied upon heavily in the UK. But it seems to be most sought after in the country’s capital, as around 1 in 4 of Londoners’ parents have asked them for money. This is much lower in other parts of the country however, such as in East Anglia, where only approximately 1 in 10 parents have done the same.
In the North East of England, 20% of adults feel they are better off financially than Mum and Dad. In Wales on the other hand, only half as many feel that they’re in a better financial position than their parents, so maybe there is still a demand for the Bank of Mum and Dad after all?
The survey found that the North West had the highest percentage of people in the UK who say they’ve repaid their parents’ debts for them. This was followed by the North East, London and East Anglia. It seems that in Northern Ireland however, it’s quite rare for people to repay their parents’ debts for them, with less than 2% saying they’ve done this in the past.
Overall though, the country in the UK where adults are most likely to be relied upon by their parents is Scotland, followed by England, Wales then Northern Ireland.
Kevin Mountford, Raisin UK Co-Founder, commented the following:
“We’ve known about the Bank of Mum and Dad for years now, but these new findings suggest that some parents rely far more on their children for financial support than we thought they did. You could view the outcome of our research as a positive sign that there’s a whole wave of younger financially savvy generations that have better access to the tools that enable them to be financially healthy.
“While it’s great to see that there are so many people in a position wherein they can help their parents with their finances, this research also highlights how important it is to keep financial planning in mind at all times, regardless of your age or life stage”.