Charles Russell Speechlys finds that over half of Gen Z say the Bank of Mum and Dad comes with strings attached

• Over two-thirds of Gen Z adults (68%) will receive support from their parents for significant life expenses, such as buying property, planning a wedding or buying a car.
• But over half (56%) of young people said that financial help or inheritance would come with strings attached, according to our research.
• Younger generations struggle to get on the property ladder without help as 57% first time buyers used Bank of Mum and Dad in 2023.

Over two thirds of Gen Z will rely on the Bank of Mum and Dad for big life purchases but over half of them say it comes with strings attached.

Our survey, which sought the views of 4,000 people, found that over two-thirds of Gen Z adults (68%) deem it likely they would receive support from their parents for significant life expenses, such as buying a property, planning a wedding or buying a car.

However, three-fifths (56%) of young people said that if they were to receive financial help or inheritance in the future, there likely would be strings attached to the gift, meaning the support carries certain conditions or restrictions, like parents getting involved with major life decisions or purchases.

The Bank of Mum and Dad is increasingly the only way for young adults to get a leg up on the housing ladder, with a third (33%) planning on using help from their parents to buy a property outright and a third (32%) to put towards a mortgage deposit.

57% of first time buyers used Bank of Mum and Dad in 2023, up from 47% in 2022, as the housing ladder slips increasingly out of reach for independent young buyers.

Feeling the pressure

When it comes to big financial decisions, just under half (47%) of Gen Z would feel pressure to follow their parents’ guidance on buying a house or property. Similarly, around two-fifths (42%) would feel obliged to follow their advice when planning a wedding (42%), buying a car (41%) or starting a family (40%).

Those who are likely to have an inheritance or financial help from their parents are more likely to feel pressured to follow their advice (50%) than those who don’t expect help (42%).

The research shows that as well as relying on their wallets, young people are going to their parents for financial advice.

Nearly two-thirds (64%) of Gen Z adults approach their parents for advice or information when making a financial or investment decision, making it by far the most popular source of support with one’s financial planning.

This comes ahead of banks or financial institutions (35%), online resources other than social media (25%), friends (24%), and financial advisors or professionals (23%).

Meanwhile, UK adults older than Gen Z are most likely to use online resources other than social media (35%), banks or financial institutions (28%) and financial advisors or professionals (24%). Just 13% go to their parents for financial or investment advice.

Sally Ashford, Private Client Partner says:

Family gifting plays a huge role in the majority of big purchases like home ownership and weddings for younger generations. Families across the generations are facing tough decisions as they try to balance the aspirations of today with the needs of tomorrow, and these decisions can create tensions between families, as children feel an obligation to follow parental advice, given the support they have received.

Avoiding family feuds

Money is one of the most common causes of family conflicts, not least when it comes to gifting. Whilst children may feel that parental help comes with strings attached, for parents, there can be tension between wanting to help their children financially and protecting the sums that are given.

However, there are solutions that parents can explore which may offer protection for monies gifted whilst helping children to get ahead and crucially, minimising disagreements:

• Declarations of trust: A legal document which records ownership of the property ensuring parents and children understand who is responsible for what. Declarations of trust can be particularly helpful when a child is buying a property with a partner, helping to protect each of their respective contributions in the event of a breakdown of the relationship. However, in the case of divorce, the family court does not have to divide the ownership in line with the Declaration of Trust.
• Family trusts: Establishing a family discretionary trust means that any funds or assets transferred to the trust can be held for the benefit of children or grandchildren, but parents can act as trustees. This means that whilst they cannot benefit from the trust assets themselves, they can retain control over the money, leading to perceived “strings attached”. Trusts afford flexibility and a level of protection.

William Marriott, Private Property Partner, says:

When it comes to helping children or grandchildren get onto the housing ladder, many aren’t aware of the concerns and questions for the Bank of Mum and Dad. As parental support becomes the main route in for young people to buy a house, we would encourage all parties involved to consider the options; it’s not as simple as handing over money and buying a flat. To avoid any disagreement about how this money should be spent, official agreements and processes are available that can ease the process for all significantly.

Related coverage

Financial Times, Estates Gazette Magazine, Today's Wills and Probate , eprivateclient, The Wealth Net