Is the Bank of Mum and Dad about to break?

retirement, financial advice, financial planning
  • Almost half (48%) of those supporting family members financially will struggle to continue doing so for the next 12 months
  • Three quarters (74%) say they wouldn’t feel comfortable asking for financial support from family or friends
  • 54% of UK adults are concerned about how the rising cost of living might impact themselves or their household

As the cost of living squeeze continues to be a growing concern, research from Canada Life(1) reveals the impact this will have on family members’ ability to financially support their relatives, both now and in the future.

Among those who already financially support their relatives, or could do so, nearly half (48%) say the next 12 months will make it harder for them to do this, or that they will be unable to support them anymore.

At the same time, relatives are feeling increasingly uneasy about asking for financial assistance. Nearly three-quarters (74%) say they wouldn’t feel comfortable asking for financial support from family or friends.

When looking ahead at family members’ ability to support their relatives in the future, almost three-fifths (58%) of adults with living parents say they would find it difficult to offer financial support should their parents need it. Nearly half (47%) say the same for their adult children, and over half (55%) for their adult grandchildren.

The findings also reveal the emotional impact the rising cost of living is having on households across the UK. Over half of UK adults (54%) are not only concerned about the impact the rising cost of living will have on themselves, but there are also growing concerns about the known effect it will have on the wider family, including their children (53%), parents (46%) or grandparents (45%).

Andrew Tully, Technical Director at Canada Life commented: “Financial support from family members has long been a helping hand for many, including the Bank of Mum and Dad which has played a significant role. However, the cost of living crisis means we may well start to see a reverse in this trend. As inflation continues to soar, families are being forced to make tough financial decisions that could impact themselves and loved ones.

“For those wanting to gift money and worried about the impact this could have on their future finances, speaking with an independent adviser is a sensible place to start. These professionals are on hand to help navigate difficult conversations and provide you with a holistic view of your finances over the short, medium and long-term, ensuring you feel comfortable and confident about the choices you make.”

Source: Research conducted by Opinium among 2000 UK adults between 11th – 14th April 2022

Source: https://www.canadalife.co.uk/our-company/news/is-the-bank-of-mum-and-dad-about-to-break/

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