The Bank of Mum and Dad has long been open for business, with parents generously donating to their children’s cause to help with the likes of home ownership and debts racked up through pricey student loans – but not everyone is willing, or able, to help their kids out financially.
British columnist Hunter Davies was one such person, revealing in a piece for The Times that he, along with his late wife Margaret, never intended to loan or gift money to their kids in life or death, even telling friends he was “totally against inherited wealth”.
However Davies revealed he has now had a change of heart and is planning to loan his children the cash they need to get onto the housing ladder in London, saying they didn’t choose to be born or raised in the nation’s expensive capital.
Writing in the UK newspaper, he said: “I was having a drink with Alan, an old friend and neighbour, and it came out that we were each helping one of our children with a deposit on a home. Alan then paused and leant back. ‘I have a clear memory of you telling me, 20 years ago, sitting here in this very cafe, that you were totally against inherited wealth. You would never give or leave your children anything’.
“‘It was mainly Margaret,’ I said, sitting down again. ‘She was the one definitely against all inherited wealth. And I agreed with her, at the time’.”
Davies also came up with 10 reasons to justify why he has begun dishing out money to his grown children – despite his late wife’s wish to leave everything to the government – including “selfishly” wanting his children and grandkids to live close by.
“We oldies have been lucky,” he went on. “Well, we homeowners have. Unlike the generations before, we have ended up in old age sitting on capital. Surely we should share our luck.”
He added: “Your first natural impulse, as nature intended, is to care for your flesh and blood. Yes, you worry that some dodgy partner will come into their life and take advantage of the fact they have a half-decent flat, or a well-off dad, but you have to trust that they, and their upbringing, will ensure whatever you might give them is spent wisely and well”
The column comes as new research reveals that one in 10 New Zealanders are now relying on inheritance, from their parents and grandparents, in order to be financially stable in later life, according to website Stuff.co.nz.
Wills and estates company Perpetual Guardian carried out the study, which revealed the shocking number of people across the Tasman who are counting on coming into some cash following the death of a loved on in order to keep them afloat/
And the findings showed that a third of those are hoping to bank at least NZ$500,000 (AU$458,000) from their nearest and dearest.