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Generosity of the Bank of Mum and Dad could be leaving Britain’s over-55s facing an uncertain retirement
Thousands of over-55s are generously gifting money as part of the Bank of Mum and Dad (BoMaD), using savings and even pensions to help their family onto the housing ladder, research from FTSE100 financial services group Legal & General and Cebr has revealed.
27 Aug 2019
Parents and grandparents across the UK are overwhelmingly in favour of supporting their loved ones to buy a home. More than half (56%) of BoMaD lenders who have or would consider helping family to purchase property said they are willing to because ‘it was a nice thing to do’. Almost another fifth (19%) said they feel it’s their personal responsibility to help out.
The new research shows that when it comes to gifting money, the Bank of Mum and Dad is drawing on a wide range of sources to financially support other family members with a deposit. Although more than half are using cash (53%), 9% are cashing in lump sums from their pension savings, 7% are using their pension drawdown and 6% are drawing on their annuity income to help support their loved ones’ homeownership ambitions.
Chris Knight, CEO, Legal & General Retail Retirement: "Thousands are still dependent on the Bank of Mum and Dad to take their first or next step on Britain’s housing ladder. The generosity of parents and grandparents is inspiring, but many are making big financial decisions without adequate planning or professional advice."