Britain’s parents and grandparents are supporting their children’s attempts to get on the housing ladder at ever-increasing levels it has been revealed, with the ‘Bank of Mum and Dad emerging as the nation’s 10th biggest ‘mortgage lender’ according to new data issued by Legal & General.
L&G’s research underlines the critical role that families play in providing an essential first step on the ladder helping hand, and in doing so, allowing every other home owner further up the chain to move on too.
Collectively, parents have given £6.3bn, which is high enough to rank the bank of mum and dad 10th if it was a mortgage lender – Clydesdale Bank, the UK’s 10th largest mortgage lender lent £5bn last year.
The data also shows that an average parental contribution for homebuyers this year is £24,100, up by more than £6,000 compared to last year. Based on L&G’s research of 1,600 parents, they also found that more than half were using cash to help their children, but others were withdrawing money from their pensions or said they would consider using equity release from their homes.
More worryingly, the study found that more than a quarter of those surveyed were not confident they had enough money to last through their retirement, and that 15% said they had already accepted a lower standard of living due to helping out their children.
Being able to help our families in a positive way whilst we are alive is something that many of us feel is very important, but choosing the right option, without threatening our own long-term security is vital – that is where a company like ours plays such a critical role.
Sitting down with our clients, then discussing every possible option with them, using our sophisticated cash flow forecasting software to illustrate how that could impact them in the future, is a very reassuring exercise before making potentially life-changing financial decisions.
With 25 years’ experience helping individuals, families and businesses to place their financial affairs in context with their future goals and aspirations, The Financial Planning Group are here to provide a simple, structured, disciplined and reviewable planning service. We will change the fundamental relationship people have with their money to give them confidence and clarity in their own futures.
If you have any questions concerning helping your family members buy a property, or ensuring your are fully protected before making a big financial decision, please call Tim Norris on 0800 731 7614 and he would be delighted to arrange a meeting at our offices in the heart of Teddington.