Is this the end of the ‘bank of mum and dad’?

For decades, many young adults have relied on their parents for financial support, whether it be for their first car, a deposit on a house, or even just a little extra cash to get through the month.

However, new research from Aegon suggests that this trend is shifting.

Younger generations may be finding themselves in a position where they can no longer rely on their parents for help, but instead may need to step up and support them.

A financial shift

According to Aegon's research, a significant number of younger adults are now preparing to become the financial backbone for their parents as they age.

This is a notable change from previous generations, where the expectation was often the opposite.

Today 37% said they’d last turned to the ‘bank of mum and dad’ in their twenties, while one in seven (14%) asked their parents for help in their thirties.

Overall:

• Two-thirds of adults admitted to benefiting from the ‘bank of mum and dad’ during their younger years.
• More than half (55%) of adults with living parents expect to provide financial support to them in retirement.
• Nearly two in five (38%) of adult children regularly foot the bill for dinners out.
• A third (34%) of people are worried their parents will have enough money in retirement.
• A quarter (25%) help cover everyday bills for their parents.
• Only 46% of those aged 45-54 feel optimistic about their parents’ financial futures.
• Just 2% of 18-24-year-olds share that confidence.

Why the change?

The shift in financial responsibility comes down to a few complex reasons, such as less generous pensions, higher house prices and the simple fact that we’re living longer.

These factors mean the bank of mum and dad is no longer a one-way street; instead, it’s becoming a shared financial responsibility.

The reality of supporting parents

With rising costs and their own money worries, the reality of supporting their parents can be daunting for many young adults.

If you’ve found yourself stepping in to support your parents, try following these tips to lighten the load:

Open communication

Having an honest conversation about money can be uncomfortable, but it’s necessary.

Talk to your parents about their situation, their needs, and what support you can realistically provide. This transparency can help set expectations on both sides.

Set a budget

Before diving in to help, take a good look at your own finances.

Set a budget that includes what you can afford to contribute without jeopardising your financial stability. Remember, it’s okay to say no if it’s too much.

Explore other options

Consider looking into alternative support options, such as benefits or grants. That way, your parents can still get some help without overwhelming your bank account.

Our free benefits calculator is a great place to start.

Encourage financial independence

Even our parents can benefit from learning about budgeting, savings, or even new income opportunities.

Exploring these options can encourage independence and reduce the burden on you.

Ask for help

It’s easy to feel overwhelmed about supporting your parents, especially if you’re already worried about money.

If this sounds familiar, it might be time to ask for a helping hand.

We’ve got tips on reducing your stress levels while our free and impartial debt advice is available online at any time of day or night.