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Bank of Mum and Dad 'risks becoming unsustainable'

Parents are compromising their own financial situation to help their children cope with the cost of living crisis, research shows.

The latest Saltus Weath Index shows eight in ten middle class parents are helping support their adult children financially, one in four of whom are helping with mortgage payments specifically.

It comes as the average rate for a two-year fixed deal has surpassed 6%.


The wealth manager surveyed more than 2,000 people in the UK with assets, including property, of £250,000 or more, and found that 79% are financially supporting their adult children in some way, of those, while 23% are supporting with mortgage payments specifically, while a further 20% are helping with rent.

The research found that 39% say rising mortgage rates are already putting a strain on their own cash flow, and a further 47% say further rate rises will cause issues. 

Nevertheless, they are still willing to provide support to their children; 22% have reduced their own pension contributions, 20% have tapped into housing equity, and 20% have sold another asset in order to help.

The research also found that 7% of respondents aged 45 and over say their children’s wellbeing is their greatest concern – above losing money and their own health and safety.

Mike Stimpson, partner at Saltus, said: “Our research shows just how much financial support adult children need in the current climate, and the lengths to which their parents are prepared to go to help them.

"Traditionally, parents have helped out their children with deposits on houses, and other investments that grow with them, but now, we're increasingly seeing clients forced to bring those investments forward to help their children with everyday costs such as mortgages and household bills.

“While our research suggests that most parents are more than happy to help support their adult children where they can, this level of reliance is not sustainable. If the younger generation continue to rely so much on their parents, it is going to have a huge knock-on effect on the whole family. 

“Their parents have been planning for their retirement – and in most cases, planning the best way to pass on an inheritance - based on their own needs, not necessarily the needs of their children. Many parents will now need to revisit their plans to ensure they are still realistic given these changes in circumstances.”


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