The bank of mum and dad has gifted more than £35bn to help their children and grandchildren get on the housing ladder according to the latest research from over 50s specialists SunLife.
The report has revealed that almost 6 million (23%) of people over 50 have given ‘significant cash gifts’ to family over the past five years, giving £15,978 on average to help cover various costs, including debts, cars and holidays.
But one of the most common reasons why the ‘bank of mum and dad’ is called into play is to help with the ever-increasing cost of buying a home.
The research discovered that, of those over 50s who have gifted money to family, 20% – equivalent to 1.2million people – did so to help a loved one pay for a deposit on a home purchase.
Most (91%) helped their own children, while one in 14 (7%) gifted cash to help their grandkids buy a house.
In terms of region, the areas where over 50s are most likely to have helped their children or grandchildren with a deposit are the North West, East Anglia and London, where 26% of cash gifters gave money for this reason.
In terms of the actual amounts gifted, the region where those who have helped have gifted the most is London where the support amounted to almost £84,000 on average – perhaps understandable given the average 1st time buyer deposit in the capital is just shy of £64,000.
SunLife’s study found that the vast majority of over 50s who have helped out family financially said that gifting the money resulted in an increase in their own happiness. Of those who gifted money to help with a house deposit, 81% said it improved their own happiness.
Mark Screeton, CEO at SunLife said “Our Life Well Spent report shows that financially supporting family is a priority for many over 50s. And given 27% say that one of their biggest financial worries is how their children and grandchildren are coping financially, is perhaps no surprise that so many want to help out.”
“The research shows that over 50s are gifting cash for a range of different reasons, from simply wanting to treat a loved one with an extravagant birthday or Christmas gift, to something more specific, like helping with a house deposit or to buy a car. And while financial need is a clear driver for why over 50s are giving so generously, there is another factor at play – happiness – with 81% of those who have gifted cash saying that doing so increased their overall happiness.”