Is the Bank of Mum and Dad closed for new customers?

5 minutes
Published November 2025

As younger people continue to strive toward the dream of home ownership, the Bank of Mum and Dad has become a reliable partner, helping endless offspring close that financial gap to reach the deposit threshold and help bring down monthly payments.

But the tide appears to be turning. Despite the first rung on the housing ladder being higher than ever, an increasing number of parents are reassessing the affordability and risk of handing over a significant amount of cash, fearful of what unexpected costs may lie in their future.

Faced with the prospect of a rising cost of living, the responsibility of looking after their own elderly parents, and planning for potential care costs, advisers’ ability to help navigate uncomfortable family conversations and build contingency plans is needed more than ever.

The emergence of the Bank of Mum and Dad

The 2008 financial crash was a landmark in the development of the global financial landscape. But for millennials in particular, it played a crucial role in shaping their attitude and relationship with money, as well as the terrain of their financial future.

Along with the term 'quantitative easing’ becoming common parlance as governments sought to mitigate the financial and social challenges, so too did the Bank of Mum and Dad, as Millennials increasingly relied upon the fruits of their parents labour to achieve the life milestone of home ownership.

The numbers are stark. Historically, only a small proportion of first-time buyers leant on parental finances. Of those who purchased their first home between 1970 and 1974, just 3% said their parents paid the entire deposit, and 4% say they paid some of it¹. By 2003-4, one in five (20%) people financed the purchase of their first home with help from a gift or loan from family or friends².

However, In 2009, 70% of first-time buyers received help to get on the housing ladder. And while this has fallen back slightly from that mid-financial crash’ peak, in 2023 nearly six in 10 first-time homebuyers received family assistance in getting on to the housing ladder².

There are sometimes emotional strings attached - just under half of Gen Z (those born between 1997 and 2012) felt obliged to follow parental guidance when buying a house. But parental support, and the expectation of it, has become firmly embedded in the financial life-cycle. More than two-thirds of young adults think it’s likely they would rely on support from their parents for significant life expenses, such as buying property, planning a wedding or buying a car³.

A domestic liquidity squeeze

But fears are growing that the familial financial resource has been taken for granted, with research finding that 59% of all first time buyers have seen their family scale back or remove support altogether⁴.

This is not because parents have suddenly been struck with a streak of heartlessness. Looking to their own future, they are expecting to live longer and the costs of that are increasingly unknowable.

Not only are general prices rising, but the provision of medical care, both sporadic and longer-term is unclear. With cost of living rising and shifting lifestyle expectations, it’s now estimated that for a comfortable retirement a couple would need upward of £60k a year⁵. That’s up from £43,900 just a couple of years ago in 2021⁶.

Potential healthcare needs and cost concerns, should later life care be required, are also a looming and substantial drain on finances. And with support from local authorities means-tested, anyone with assets over £23,250 will need to ‘self-fund’. A live-in carer, for example, can cost up to £1,600 a week if a lot of care is required⁷. Even a residential home can be upward of £700 a week - more if it’s a nursing home⁸. All of a sudden, that pot of money successfully built-up over a lifetime risks being spread rather thin.

Other parents, while not entirely withdrawing support, are looking to exert more control of the financial decisions being made with their money. Fifty-six per cent of Gen Z adults said financial gifts from their parents came with conditions or restrictions⁹. Some parents are also exploring less straightforward financial arrangements too, for example, loaning their children money but with firm conditions and expectations.

Alone together

This divergence of expectations can cause relationship and financial challenges, as can the creation of legally binding financial contracts between loved-ones. Advisers have a key role to play in anticipating and navigating such challenges.

Helping clients clearly identify their retirement goals and subsequent financial requirements is fundamental e.g. utilising cash flow modeling and insights from open banking data. But then so too is helping them have, or even facilitating, conversations with their family about what that means for possible gifting. This would include looking at whether other options may be suitable e.g. interest free loans, trust structures etc.

Finally, advisers could also take the opportunity to start open dialogue with the next generation, helping them understand the types of financial decisions that they should be making as they work toward earlier life milestones such as weddings, children, or getting on the elusive property ladder.

Just because their parents are not necessarily in a position to give them the financial aid that they may have hoped for, doesn’t mean that they have to go it alone.