The Bank of Mum and Dad is still very much open for business but it’s considerably less generous with financial assistance than it was before Covid-19, according to new research.

Financial comparison site Finder surveyed hundreds of parents of adult children, then compared the results to those of the same survey it conducted at the same time last year – and found that fewer parents were providing a financial crutch to their kids and those that were were providing a lower level of assistance, particularly on the more expensive items in life.

Finder’s 2020 survey found that 44 per cent of parents were subsidising their adult children in some form, compared to 54 per cent of parents in 2019.

Of  the parents who have been funding their kids this year, 17 per cent let their adult children live at home rent-free, while 23 per cent helped to pay for groceries. That constituted a considerable drop on last year’s Bank of Mum and Dad survey, which found 40 per cent of parents were letting their children live at home at no cost and a further 40 per cent were paying for groceries. In a similar vein, in 2019 one in three parents were paying mobile or internet bills for their adult children, compared to just one in seven who said they were doing so in 2020.

And mums and dads have been spending less of big items too, possibly as property sales have slowed down due to Covid-19. In 2019, 15 per cent of parents said they had helped their kids get on the property ladder by paying a portion of their house deposit, either through loaning or gifting money. This year, that number had halved to just 7 per cent of parents surveyed. At the same time, the proportion of parents who went guarantor for their child on a mortgage dropped from 5 per cent in 2019 to 3 per cent this year.

Graham Cooke, insights manager at Finder, said that despite the drop in Bank of Mum and Dad handouts, it remained surprising how many ‘kidults’ were being funded by their parents.

“It seems that parents feel responsible for ensuring their kids are on a sound financial footing, no matter how old they are” he said. “Thousands of first-home buyers are reliant on their parents to get on the property ladder, with their mum and dad helping with everything from house deposits to mortgage payments.

Cooke cautioned, though, that while many parents wanted to help their kids enter the housing market while conditions were favourable thanks to a combination of low interest rates, price dips and government schemes, it was important parents were certain of their own financial security first.

“If the pandemic has taught us anything, it is that parents need to make sure they have an emergency fund set aside for their own use because you never know what might happen,” he said. “Helping your kids is how many see the job of a parent, but mum and dad need to make sure they aren’t putting their own financial position at risk in the process. The last thing anyone wants is the Bank of Mum and Dad to go bust.”