For years Millennials have been borrowing money from their parents and grandparents, whether its to help towards a deposit for a house or to get them through difficult times. But now new research has revealed that the ‘bank of mum and dad’ could soon become a thing of the past.
Instead of handing out their hard-earned cash to assist their beloved children a study conducted by UK company Smarterly found that the tables could soon be set to turn, as a whopping one quarter of young people claim they expect to financially support their parents later in life, Finance Derivative reports.
Contrary to popular belief that the bank of mum and dad is used regularly, the survey of over 1,200 people showed that 33.3 per cent of those aged between 18 and 35 receive no financial support from their parents or family. And even more surprisingly, 26.6 per cent believe they’ll be the ones providing financial assistance to their mums and dads as the years go on.
Head of proposition at Smarterly, Steve Watson said the potential emergence of the ‘bank of son and daughter’ is a cause for concern as Millennials are more worried about their parents’ funds than their own.
“We’re in a sad situation where over a quarter of millennials have added mum and dad’s finances to the list of their own money worries,” he said according to Finance Derivative.
“While the survey shows that over a quarter of young people think about parent’s future money, fewer than a tenth of young people (9.27 per cent) see their own retirement funds as the biggest financial concern.”
Watson added: “Younger peoples’ financial worries are very different from those of older generations – rocketing housing prices, low pay and a culture that normalises getting by on credit are all pressing. Quite naturally, there are a lot of hurdles and opportunities for most young people before even thinking about their own retirement.”
The latest findings are a contradiction to previous reports which have claimed Millennials rely strongly on the financial assistance from their mum and dad.
In fact, last year a leading property investor who has bought and sold more than 10,000 properties since leaving school at the age of 17, said youngsters nowadays should take advantage of the bank of mum and dad to help them bag their first home.
John Fitzgerald, the author of 7 Steps to Wealth, dished out some advice for prospective home owners who are struggling to scrape together the deposit for a property during an interview on Miranda Devine’s Miranda Live podcast.
The self-made property expert, who founded the JLF Group, told young people to “hit up your parents or grandparents” or find another way to get the money together in order to take their first step onto the property ladder.
Fitzgerald, who owned over $1 million in net property assets by the age of 25, told Miranda: “You’ve got to find a way. There are banks who will let you in on a five per cent deposit. If you can save up, save up. Or hit up your parents and grandparents for that stake.
“If you haven’t got the money, find access to it. I bought my first property in 1983 and I started with $2,500. It sounds scary but they are the hard yards you’ve got to do at the start.”
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial situation, objectives or needs. That means it’s not financial product advice and shouldn’t be relied upon as if it is. Before making a financial decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services advice.