The Bank of Mum and Dad has had to stay open far later and provide much bigger loans to its clients over recent years. The Guardian recently reported on how an increasing number of young adults are forced to live at home for longer as house prices continue to soar and youth unemployment remains high.
Many young people feel entirely reliant on the help they are offered by their parents and feel unable to support themselves but should there be a cut-off point and can the Bank of Mum and Dad ever close? After all, Mum and Dad have their own expenses to meet which could include the cost of snapping up a McCarthy & Stone retirement apartment.
Answer these simple questions to assess whether you should leave the Bank of Mum and Dad for good:
- Whose need is greater? Are your parents struggling in order to help you?
- Are you relying on this service simply because it is the most comfortable solution?
- Have you neglected to save money due to your reliance on your parents?
- Have you failed to do everything you can to become financially independent?
If you answer yes to one or more of these questions it may be time to face reality and fly the nest.
The Bank of Mum and Dad can be a smart solution for many young adults as long as it is used in the correct way. However, it is important that it is not used as a crutch to delay important life decisions. This cut off point shouldn’t necessarily be related directly to age as we all become financially independent at different points but more about your individual situation.
The Times reported on a new building society that promises to help young people get on the housing ladder independent from the help of parents and will offer lower rates to homebuyers by using cash deposited in relatives’ accounts as security. It is yet to be seen whether schemes like this will help the Bank of Mum and Dad close for good but it is positive to see new options becoming available.
If leaving the Bank of Mum and Dad is not an option for you, there are several other ways you can ensure your parents generosity and help is returned in years to come. This help may be in the form of helping and supporting your parents as they enter retirement.