The big purchases in life are only getting more expensive, but just how many adult Brits are coughing up the cash themselves, or turning to their parents for financial help?
Pensions advice specialists Portafina surveyed the nation* to find out how many are struggling with big purchase costs or even everyday bills and turning to the bank of Mum and Dad for help.
The results revealed that more than half of Brits aged 18 to 45 have savings that have been added to by their parents (56%) with more than half of UK parents (52%) gifting up to £5,000 to their children with no expectation of it being paid back. Despite this, two-thirds of Brits aged between 18 and 45 said they didn’t expect their parents to gift them money (65%).
Those who receive the most financial help from their parents are 18-24-year olds (57%), with nearly a third of this age group receiving help with their phone bills (30%).
When it comes to men versus women, more men admitted to having received monetary help from their parents (66% vs 51%).
The top 10 purchases/financial costs the bank of Mum and Dad is helping Brits fund:
- A first car (30%)
- Holidays (23%)
- Deposits for a first house/flat (20%)
- Wedding costs e.g. dress/suit, venue hire (20%)
- Support with costs involved with driving e.g. insurance, petrol, maintenance (17%)
- Household bills (17%)
- Education e.g. university fees, accommodation costs (17%)
- Support with first property costs e.g. solicitor fees, furniture (15%)
- Subsequent car/cars (12%)
- Phone bills (9%)
The majority of Brits are happy to be upfront that they couldn’t have afforded key life purchases without their parent’s help (77%) and only 6% confess to covering up the truth due to embarrassment.
“When the house I was renting in Leeds went up for sale, my dad offered to pay the deposit so I could purchase it. I didn’t expect him to offer and I’m not embarrassed about telling people I had help either – without his help I don’t think I’d have been able to get on the property ladder this early.”
India, 26, Hertfordshire
Reasons parents help their children include:
- They wouldn’t manage financially without my help (39%)
- I have the disposable income available (38%)
- My parents helped me out when I was younger so I want to do the same for my children (25%)
- I helped their siblings out in the same way (16%)
Commenting on the research, Jamie Smith-Thompson, managing director of Portafina said:
“We have much to thank our parents for if this top ten list is anything to go by. But it’s safe to say not everyone will be in a position where they can help, despite best intentions.
“When it comes to helping their adult children, parents should take a moment to consider their own financial position. It’s great to want to be able to help, but it’s ok to say no if you feel it will be detrimental to your own plans.
“As a Dad it’s music to my ears that children generally don’t expect to be gifted money. Of course there are some horror stories of adult children leading the life of riley at their parents’ expense. But this shouldn’t detract from the fact that it’s natural for parents to want to give their children a head start in life.
“For parents of younger children there are a number of things you can do now to help with financial independence in adulthood. It will mean you won’t need to find a big lump sum of cash when the time comes.
“From bank accounts and Junior ISAs to Lifetime ISAs or pensions, you may be surprised at some of the options available for parents and the wider family to contribute to young children’s savings. It’s simple to get started with any of these, and there really is no time like the present when it comes to saving for their future.”
*2,000 UK adults aged 18 to 45, and 1,000 UK parents by TLF Panel in November 2018