The Bank of Mum and Dad

As another week goes by in which one, or both, of my adult children need their parents help financially I wondered if we were alone. However, this is what I found.

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In the US 47% of adults with Millennial or Gen Z children are helping them financially. Doing so at an average cost of $1,384 a month. This represents about 27% of the average annual salary in the U.S. in 2023.
In the US 61% of adult children living with Mum and-or Dad contribute no money towards household expenses.
58% of parents say they have sacrificed their own financial security to bail out their kids.
In the UK 75% are still supporting their adult children. Handing over £3,000 a year.
The vast majority of the money goes on rent, food, and mobile phones.
In addition record number of first time house buyers are being helped by the bank of mum and dad. Sometimes with help of grandparents and siblings too. This equates to 47% of buyers aged over 55 and 72% of first time buyers.
An average of £25,600 per transaction and set to increase.
Meanwhile nearly half of all Americans ages 18 to 29 were still living at home.

The Trend

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It’s a sad fact but adults in their early 40s and younger are saddled with financial challenges unknown by other generations in modern times. They have lived through the Great Recession, the COVID War, and post-COVID inflation.

Financial crises have foreshortened their career trajectories and stunted their earnings; many adults earn less than their parents did at the same age.

Student debts, which in the US averages at $29,400 and in the UK averages at £45,600, present a further burden.

As a trend this is unfortunately one that is sharply increasing.

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