First Time Buyer
Parents fast-forward inheritance plans to help kids amid squeeze
A quarter of parents with adult children said they would be supporting them in the coming months, up from 20% two years ago.
However, the current proportion is expected to stay stable over the coming year, according to a survey of 2,000 people by Saga Equity Release.
Around 64% of parents said they expected the cost-of-living crisis to have a greater impact on their children’s finances than the pandemic, pointing to rising bills, low savings, and increasing rent and mortgage payments.
Saga added that a quarter of respondents expect to support their children more now than they did during the pandemic.
The pandemic and the cost-of-living crisis has led to many over-50s re-evaluating their inheritance plans, Saga said.
Saga reports that under a quarter (24%) of respondents said the cost-of-living crisis had made them reconsider their plans to share their estate with family.
Around 15% said the cost-of-living crisis could lead them to gift money, compared to the 12% who gifted money during the pandemic. The average gift is 9% of their estate.
Just 5% of over-50s were considering equity release, which rose to 13% for those aged over 80.
The amount drawn down by equity release customers has also increased by 12% since 2020.
Alex Edmans, head of retirement at Saga Personal Finance, said: “The last two years have been unparalleled in terms of the impact on our finances, with further challenges on the horizon.
“The Bank of Mum and Dad was a critical lifeline for many people during the Covid-19 pandemic, and our research points to a growing dependence on family support as inflation continues.”
He added: “As dipping into savings or investments becomes less realistic in the cost-of-living crisis, more parents are now considering different approaches to inheritance – be that fast-forwarding plans, gifting sums of money or releasing equity from their homes. We could see permanent changes to attitudes towards inheritance as a result.”