The “Bank of Mum and Dad” will provide £17bn in gifts and informal loans to help with property purchases and boost the finances of their newly married offspring this year, according to a report by the Institute for Fiscal Studies.
With property prices outpacing income and the cost of living growing, it’s an incredibly difficult time to be a young person. While some receive financial help from their parents to help them get by, for others it works the other way round.
Alice*, 25, works in marketing and design and earns £55k a year. She lives in South West England with her partner and financially supports her mum and 27-year-old brother.
Since she was in her mid teens, Alice has worked to keep her family afloat. In the years after the 2007-8 financial crisis, her family went through years of money difficulties until her parents essentially lost everything and eventually divorced in 2014.
Her dad moved away, leaving Alice in a rented property with her mum and brother, who both developed depression. Alice gave up her dream of going to university to start working, and took out an £8.5k loan to cover six months’ worth of rent and bills.
Today, Alice still sends her mum money each month and regularly supports her brother financially. She’s also saving for a house deposit for her parents, who remained friends despite the divorce.
Here, Alice shares what it’s like to have provided for her family throughout her whole adult life, while her friends received cash gifts and house deposits from their parents.
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"When the 2008 crisis happened, my parents were in the start-up phase of running their own company"
They’d just put pretty much all of their savings into it and lost everything when the market crashed.
When they split up in 2014, we lost our home with negative equity. I was 17 years old and my mum and I moved into a rented two-bed bungalow. My brother lost his job and had to move in with us unexpectedly, so he slept on a mattress in the lounge.
My mum felt ashamed about losing the house and my brother felt ashamed about having to move back in with our mum. They both became clinically depressed and my mum ended up losing her job.
“It was down to me to start working to bring money into the family”
I had to drop my educational and career dreams of becoming an astrophysicist. I scrapped my plan to go to university and started working. I started as an admin assistant on a £15k salary.
This wasn't enough to pay the bills so I took out an £8.5k loan to pay for our rent, bills and food for six months. I'm still paying it off eight years later at £200 a month because of the interest.
“I upskilled to increase my salary from £15k to £55k a year”
I knew it was going to be down to me long-term to look after my family, so I started upskilling every way I could. I did finance exams and eventually found a job in financial marketing. Every 18 months or so I’ve changed my job to get a higher salary. Over the last eight years, I've gone from making £15k to £55k a year.
“I'm the only one in the family who earns any decent money, so I still support my mum and brother financially”
My mum has bad health issues so she can't really work full time. And my brother still lives at home with her and has tried to get himself okay again, but it's not going well. I give her £100 to spend a month then put £300 into savings for her.
In the winter, when the energy price hikes happened and my mum was sitting at home cold, I sent her another £100 to put her heating on because I didn’t want her to be cold. I’ll do food shops occasionally and slip money into her bank account without her seeing so she can eat.
I help my brother as much as I can. I'm paying for his driving lessons so he can get a better job and I paid for his car insurance too. When his car was written off, he just left it on the road and got a £500 fine. That fell to me.
“Over the last nine years, I’ve worked myself to burnout multiple times to save as much as I can to buy my parents a house”
My parents still get on really well. Neither of them has any money and they're both nearing retirement age, so the state pension isn't going to keep them going. I’m saving to buy them a house so I know they’re safe and protected.
My partner and I have a joint bank account and we put £1.5k a month into a Pot for my parents. So far we have about £9k saved and the goal is £25k. Once we’ve paid our bills each month, we do everything else as cheaply as possible.
We’re also saving £900 a month towards our own house on top of the £1.5k for my parents. Our goal is £30k and we’ve saved £9k in a house Pot.
“I have five Pots to help me stick to a strict budget”
We have a shared bills Pot for our phone contracts, electricity and water etc., a shared savings Pot for my mum and dad, our house savings Pot and a shared treat Pot for specific things we want to save up for. I also have a treats Pot for myself.
Every week we budget £65 for food for both of us. We cook our own meals every day – I don't remember the last time we went out for dinner.
“I’ve made huge sacrifices to support my parents – there’s £1.5k a month that could be spent doing things I want to do”
Everyone else my age is going on holiday and having experiences that I'm just not. My friends buy clothes, go on holidays, go out and do things while I don't. I sacrificed my whole education for my family, I don't have a degree. My spare time throughout my teenage years wasn’t spent going out and socialising but upskilling so I could earn more money to support them.
I feel mixed about it. In some ways, I think it’s a really good thing. At times I think I maybe would’ve had children by now if I didn't already feel like I’d spent my teenage years parenting my parents. But I also wish I’d had freedom and didn't have a massive weight on my shoulders all the time.
“It's hard when friends talk about buying houses and getting loans from their parents”
It's really intense having so much responsibility. Ever since we lost everything I've been in counselling or therapy which I find helpful. Sometimes it's an awful lot of pressure.
It's really hard when my friends talk about buying houses and they're getting a loan or help from their parents. In my life it’s the other way around. It's not always the Bank of Mum and Dad, it's sometimes the Bank of Kids.
Not everyone's parents can afford to help them out.
“Once I’ve finally bought them a house I’ll be able to start living for myself again”
I was about six years old when everything started going wrong for my family and then 2008 came and I was 11. So I haven't really had the chance to be a whole person yet. I've just been supporting everyone else around me. I'm quite excited to do things for myself, be myself and not have to think about everyone else around me and whether or not they've got a roof over their head and food in their fridge.
“While everything else was going on, I studied the psychology of PTSD and financial trauma”
I helped my parents and brother through their financial trauma as well, and I’ve worked with local schools to help kids who’ve also been through something similar.
This was motivated by my own experience. For a long time, I was terrified of credit cards, losing my job and even of spending money. I don't want other people to feel that way. My family wasn’t the only one that lost everything in 2008 and those kids are now grown up and probably traumatised from losing everything.
*We’ve changed her name