What is it?
The Bank of Mum and Dad refers to the financial support parents provide to their adult children, particularly in areas like buying homes, education or covering living expenses. It has become increasingly significant as younger generations face economic challenges in the UK.
how could it help you?
HOMEOWNERSHIP
- Deposits: Parents often contribute to or fully fund deposits for homes, helping their adult children get onto the property ladder. It’s more common than you think so don’t be afraid to share this with your parents who could help you get out of rented and into your own home faster.
- Loan Guarantors: Your parents can act as guarantors on mortgages, making it easier for you to secure financing. Some banks like Barclays take into account your parents support to help you meet their mortgage requirements. So be prepared to discuss this with them, they will support you.
EDUCATION
- Fees: Parents often help to paying for university fees to reduce the burden of student loans in the future. Or if you graduated and feel under pressure with high student debt your parents could help you to pay if off sooner. Living
- Expenses: Some parents help with rent or other costs during university years to help you get through it as the cost of living crisis is affecting us all.
HOME
- Rent: Parents may help pay rent, especially in expensive cities like London or help you if you move back home saving on rent and bills so you can save up for a deposit for a home or build up some capital for yourself.
- Side hustles: Parents can help you with set up costs so you can earn more on top of your job or your side hustle becomes your main income.
DEBT
- If you have debts your parents can help you out so you don’t have to rely on on high-interest loans or credit card debt. The Bank of Mum and Dad can be and should be your first call for help and support if you feel under pressure.
GIFTS
- Parents can share some of their wealth with you through gifts or loans thereby giving younger generations a financial leg up, helping to offset flatling incomes and rising costs of living.
RISE OF THE BANK OF MUM AND DAD
With the challenges facing many young adults today, the Bank of Mum and Dad is growing as a source of financial and mental support to help them navigate the tough economic situation in the UK.
Some parents may think all you need to do is work hard like they did and everything will be fine, that’s no longer true as you face a tougher situation today so you need them to understand this and to help you where they can.
We salute those parents who provide this support and encourage more of them to do the same and share their wealth with the younger generation so they can have be better off in the future.
This information is intended for editorial purposes only and not intended as a recommendation or financial advice