Over two thirds of Gen Z will rely on Bank of Mum and Dad for big life purchases but over half of them say it comes with strings attached, according to new research.
A study from law firm Charles Russell Speechlys, which sought the views of over 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.
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, Partner, Charles Russell Speechlys, said:
“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.”
