Bank of Mum and Dad not as big as previously thought

10 April, 2013

New research has revealed that the Bank of Mum and Dad might not be as big as previously thought. While large numbers of first-time homebuyers report receiving parental help with deposits, new data from StepChange Debt Charity reveals that young adults don’t borrow as much from friends and family as older generations. 

Under 25s owe less to friends and family

In 2012, the average amount owed to friends and family by those seeking help from the charity under the age of 25 was £1,761. This was far lower than £3,458 for those aged 25 to 39. While the amount owed to friends and family by those aged 40 and over was twice the amount of those under the age of 25. Last year, clients aged 40 to 59 owed £4,341 to friends and family while those aged 60 and over owed £4,229.

Decline in amount under 25s owe to friends and family  

Not only do the charity’s clients under the age of 25 owe less to friends and family than older generations, the amount they owe is decreasing too. The average amount owed to friends and family by a StepChange Debt Charity clients under the age of 25 has gone down from £1,894 in 2009 to £1,761 in 2012.

Commenting on the figures, Delroy Corinaldi, external affairs director at StepChange Debt Charity, said: 

“While large numbers of young adults rely on their parents to provide the funds for a deposit on their first home, they are a lot more financially self-reliant than the idea of a ‘Bank and Mum and Dad’ suggests.

“If anything these figures show that young people are not as willing to rely on their parents financially as previously thought and are only seeking help from the ‘Bank of Mum and Dad’ as a last resort when trying to buy their first home.”