Despite a significant proportion (62%) of millennials needing to rely on their parents to help them get on the property ladder, a quarter worry about supporting their ageing parents financially in the future, research has found.
Bank of mum and dad becoming more generous
According to Legal & General’s Bank Of Mum and Dad (BoMaD) research for 2019, family and friends typically spend over £24,000 helping their loved ones get on the property ladder. This represents an increase of £6,000 on the average contribution seen last year (£18,000).
But the BoMaD isn’t just providing younger home buyers with financial assistance. While millennials (those aged 35 and under) continue to rely on their parents and loved ones the most, more than a fifth (22%) of people aged 45-54 have also received financial assistance to help with the purchase of their latest home. Furthermore, 7% of over-55s have also received financial help to buy their most recent home.
Millennials under pressure to support their parents
Meanwhile, new research from Smarterly has revealed insights from a different perspective, one that explores the financial pressure felt by younger generations when it comes to supporting their parents later in life.
According to Smarterly’s research, which is based on a poll of 1248 employees and 508 HR professionals in UK businesses, one in four individuals born between 1981 and 1996 are concerned about the future financial implications of looking after their parents.
As highlighted by Steve Watson, head of proposition at Smarterly: “We’re in a sad situation where over a quarter of millennials have added ‘Mum and Dad’s finances’ to their own list of money worries, and less than a tenth (9.27%) see their retirement funds as the biggest financial concern.”
Most want to build up savings
The Smarterly research also reveals 33.2% of 18-35 year olds receive no financial support from their parents or family, but would glady welcome support so they could accumulate some savings in the short to medium term.
With an ageing population and the costs of health and social care rising, young people are facing a reality that will see many of them having to financially support their parents. This comes at a time when most younger individuals are already struggling to get on the property ladder and living on credit has become the norm. It’s a situation that is eroding the financial security of both young and old people alike.
The sad reality for many younger individuals is that they will face a lifetime of credit, struggle to climb the property ladder and then have to think about surviving financially once they have hit retirement age and finished work. Add to this the worry associated with potentially having to support their parents too and it’s easy to see why so many millennials are feeling daunted.
Nevertheless, younger individuals can alleviate some of the stress associated with financial worries by taking out suitable, relevant protection policies. Protection, such as critical illness cover and income protection, is designed to provide a financial safety in the event of an illness or injury leaving them unable to work.
I joined Premier Choice Group as a Healthcare & Protection Consultant in 2017, where I now look after the needs of over 200 clients nationwide. Prior to joining the Premier Choice Group, I worked for a large Private Healthcare Insurer, VitalityHealth, and managed SME and Individual clients across the country.