More renters likely to be helped by Bank of Mum and Dad

The cost-of-living crisis is leading to further dependence on the Bank of Mum and Dad, following an extended period of support given during the pandemic.

Research from Saga Equity Release shows that in October 2020 just one in five parents said they were helping their adult children financially. 

Almost two years on, this support has intensified with one in four saying they will be providing financial support to their adult children over the coming months, covering accommodation and other costs as required. 

Some 64 per cent of parents also expect the current cost of living crisis will have a greater impact on their adult children’s finances than Covid-19. This is because of rising bills, a lack of savings, and increasing rent or mortgage payments.

As a result, one in four also expect to support their children more than they did during the pandemic.

Saga claims its research shows that the events of the last two years have caused many over-50s to revaluate their inheritance plans and think more flexibly to support their families.

Around one in four say the cost-of-living crisis has changed how they plan to share their estate with their family – rising slightly from 21 per cent due to the pandemic.

And while 12 per cent of over-50s gifted away money during the Covid-19 pandemic, 15 per cent now expect they will do so at some point during the current cost-of-living crisis.

The research also suggests that five per cent of parents aged over-50 are also now considering equity release, rising to 13 per cent for those aged over 80, with the main reasons being to release funds to support family, and as a result of the cost-of-living crisis.

Alex Edmans of Saga Personal Finance comments: “The Bank of Mum and Dad was a critical lifeline for many people during the Covid-19 pandemic, and our research points to a growing dependence on family support as inflation continues.

“As dipping into savings or investments becomes less realistic in the cost-of-living crisis, more parents are now considering different approaches to inheritance – be that fast-forwarding plans, gifting sums of money or releasing equity from their homes. We could see permanent changes to attitudes towards inheritance as a result.”