The New Face of Family Finance: Supporting Both Parents and Children

Financial Support Trends Across Multiple Generations Discussed in the Article

The article “People are now supporting their parents, as well as their children” from the Liverpool Echo highlights notable trends in intergenerational financial support among High Net Worth Individuals (HNWIs) in the UK. Here is a summary of the key points discussed:

Key Trends:

1. Dual-Generation Support

• Nearly three-quarters of HNW parents are providing financial support to their adult children.
• About two-thirds are also supporting their own ageing parents or grandparents.
• As many as 1 in 8 are offering financial support both up (to parents/grandparents) and down (to children).

2. Emergence of BOSAD (Bank of Son and Daughter)

• The traditional Bank of Mum and Dad (BOMAD) model, where parents support children, is now matched by the Bank of Son and Daughter (BOSAD).
• Adult children are increasingly supporting their elderly parents, reversing the usual direction of financial help.

3. Sources of Funding

• 42% of HNWIs use excess income to provide this support.
• One-third resort to selling or using existing investments.
• 18% cut back on lifestyle spending to afford family support.
• 1 in 8 are sacrificing their pensions, either by withdrawing from pension pots or reducing contributions.

4. Reasons for Support by Generation

5. Size of Support Provided

• Nearly 1 in 5 supporters have gifted over £10,000 in the past year.
• 7% have provided more than £15,000.
• The average sum gifted is around £7,500.

6. Broader Implications

• This multi-generational support often comes at a personal cost, with many sacrificing financial goals, investments, or retirement savings.
• Wealth flows between generations are shifting, and these pressures could have wider economic impacts, such as reduced business investment and pension saving.

Summary:
Families are increasingly stretched as financial providers—supporting both adult children and ageing parents. This dual obligation is creating both personal financial strain and shifting long-term wealth dynamics, marked by the emergence of the “Bank of Son and Daughter.” The most common reasons for support range from covering essential living expenses for parents to helping children onto the property ladder. These trends highlight growing financial pressures across generations and potential wider impacts on the economy.

For more details, read the original article here: Liverpool Echo – People are now supporting their parents, as well as their children.

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