Almost a quarter (24%) of UK adults have received financial support from family members in the last year, according a new report from the Social Market Foundation (SMF).
The report, ‘Britain’s Family Bank’, which was sponsored by the Post Office, reveals that UK adults received financial support worth an estimated £53bn, or an average £4,202 annually per person.
Contrary to popular perception only 7% sought financial help from other family members to buy a house, with most borrowing cash to help cover daily living costs (23%) or pay bills such as gas or electricity (11%).
The research found that 27% of people with adult children are providing them with on-going financial help, with many still receiving financial support from the “bank of mum and dad” well into their 40’s or 50’s, and some cases into their 60’s.
According to the study, 38% said they would be unable to cope without the financial support offered by their family. A quarter of those surveyed (25%) said this provided them with long-term financial security.
The report suggests that support is not limited to just the wealthy, with payments to adult children common among parents on lower wages, including a third (32%) of those in lower skilled occupations – including jobs such as cleaners, retail staff, care workers and lorry drivers.
The report also highlights the lack of advice or financial schemes tailored towards family financial interactions, even though many people worry about the long-term repercussions of giving money to family members.
21% of people expect to provide support to older family members with the costs of retirement, but 37% of those aged over 55 who provide help to family members say their own savings and pensions are suffering as a result.
SMF Research Director and report co-author, Nigel Keohane said: “This research shows that, for the most part, financial help from parents isn’t about well-off families passing wealth down the generations. It’s about people helping adult children and others, some of them in their 40s and above, just to get by.
“Many people just couldn’t live day-to-day without support from the “family bank”.
“For many parents, helping children is a source of happiness, but the scale and importance of these wealth transfers demand more engagement with the issue from politicians and regulators.
“This should start with stronger efforts from politicians to help modern Britain break the taboo about talking money and making sure that appropriate advice is available.”
Owen Woodley, CEO Post Office Financial Services & Telecoms said: “So much has changed in recent years which has directly affected how we live our lives and in turn how we manage our finances.
“As a result, financial interdependence across generations is growing and becoming more complex.
“At Post Office we want to recognise these changing needs and do all that we can to ensure all are supported to get the most out of today while also setting themselves up for the future.
“As a financial services provider we’re committed to developing financial products that help solve real problems British consumers are having and are proud to work with the Social Market Foundation to examine the implications of our interconnected financial future.”