Still raiding the Bank of Mum and Dad: How a growing number of middle-class 40-somethings are going to their parents for cash
As my dad writes out the cheque, I feel like a teenager again, asking for a new pair of shoes or tickets to see my favourite band. Except this time I’m a 41-year-old mother-of-two with a house and husband of my own and, really, this shouldn’t be happening.
But times are hard. My husband Colin, a magazine editor, hasn’t had a pay rise in years, and my freelance writing career, while moderately lucrative, hardly has us sloshing around in cash.
There’s usually just enough to cover the basics — the mortgage on our four-bedroom terrace house in North London, food shopping, children’s clothes and repairs on my clapped-out, ten-year old Golf — but our budget can’t stretch to luxuries like the 2,000 flights to this year’s family celebration overseas in Israel.
Hence my going cap in hand to my Mum and Dad.
Easing the burden: A rising number of parents are giving financial aid towards their middle-aged children
It isn’t the first ‘donation’ they’ve made to the family finances in the past few years, either. They contributed to my eldest son’s pre-school fees when they realised we were stretched to our limit, and even covered the costs of a holiday apartment, again in Israel, last year.
My father, a retired GP who has worked hard all his life, insists it is his pleasure to help us out financially and feels sorry we have to raise a family in such a tough economic climate.
‘We want to make things easier for you and, luckily, we can,’ he tells me kindly when I apologise for leaning on him and Mum. So far, they’ve helped us to the tune of nearly 5,000.
The youngest of five children, I do wonder if I’m getting special treatment.
To my knowledge, neither my elder brother nor three sisters have banked with Mum and Dad since their weddings several years ago. But then, their finances seem to be weathering this recession much better than ours.
They know about the help we’ve received. As a family we’re close, and it’s hard to keep secrets. But there’s no jealousy, charges of favouritism or worries that I’m chipping away unfairly at the family inheritance. If anything, I think they’re relieved that, financially, they can stand on their own.
“My parents should be going on cruises and indulging in their retirement…instead they”re handing over the pennies so I don”t have to watch mine”
As for my parents, they are on the other side: mortgage-free, with a healthy pension and savings built up before the economy chained its ankles to the balls of debt.
They should be going on cruises, partying and indulging in other lovely, expensive retirement hobbies that make growing old look fun. Instead, they’re handing over their pennies so I don’t have to watch mine.
I feel ashamed. They’re not rich, and I’m a grown-up with a solid work ethic and an innate sense of pride that they, my wonderful parents, passed on to me.
But this lingering recession won’t allow my family — and thousands like us — to come up for air.
Working hard means being able to provide a roof over your head, food on the table and precious little else. Frills like a new winter coat, holiday or a West End theatre trip are out of the question. For the time being, anyway.
When I gingerly raise the subject of borrowing from parents among friends, many of them lawyers, teachers and journalists like myself, I expect to be laughed out of their comfortable homes.
Helping hands: Katy with her mum Beryl who is giving her financial support
And yet, instead of condemnation, out pour the confessions. The Bank Of Mum And Dad is the only one thriving in modern Britain, it would seem.
It helps pay for renovations, private school fees, that holiday in Andalucia and, in one couple’s case, even their monthly mobile phone bill.
New research by Aviva reveals that nearly ten per cent of women between the ages of 35 and 40 rely on their parents’ financial help — and more than a quarter of parents think they will never stop supporting their children financially, according to another survey by Legal & General Investments.
You don’t have to tell this to Amy Warbrick’s father John Pemberton. A microbiologist from Brisbane in Australia, he contributes regularly to his 37-year-old daughter’s finances in Britain and even paid for a quarter of her five-bedroom family house in Sunbury-on-Thames, Surrey.
Amy, a former air stewardess, and her 40-year-old husband Steve have three children — Stanley, three, Sidney, ten months, and Steve’s 13-year-old son Jack by a previous relationship who stays every other weekend. Until this summer, they were all crammed into a two-bedroom flat in London.
‘We’d talked about moving a few years back, and at the time, my father had offered to help us out. But we weren’t quite ready, so the offer was withdrawn,’ says Amy.
But after Stanley was born, the situation intensified. ‘We always wanted to keep the second room for Jack,’ adds Amy. ‘So it meant that Stanley was on a mattress on the floor on one side of our bed and Sidney in a Moses basket on the other.’
Soaring costs: Couples are now requesting financial aid forcing their retired parents to use their retirement funds
Steve had a good job as a sales manager for a software company, but house prices, moving costs and surviving on one income made moving to a bigger property a distant dream.
At this point, Amy steeled herself for a difficult phone call.
‘I was so nervous,’ she recalls. ‘We didn’t see Dad that often, maybe once every couple of years, so I felt uncomfortable having to ask him for money. But we had to get out of the flat. None of us were sleeping properly and weekends were filled with arguments and tension because we had no space.’
Thankfully, her father was happy to help. His substantial contribution to the down-payment means Amy and Steve have a manageable mortgage and, together with a lump sum from Steve’s parents for renovations, they’re settled in their dream family house with huge garden and more space than they could have ever imagined.
‘I don’t feel guilty because our parents were so glad to help,’ says Steve, of the money gifted to them.
‘We could never have moved into such a big property on our own, and it’s improved the quality of our lives no end. Everybody benefits, too. The kids have a lot more space, Amy and I feel less pressure and obviously our parents now have somewhere to stay.’
Amy’s father also wires a couple of hundred pounds into her bank account every month, which helps with extras like children’s clothes and toys.
‘It’s most likely to end when my father retires soon, but for the time being, it means we’re not struggling,’ says Amy. ‘I’m so incredibly grateful to him, and he tells me he’s just happy to have relieved the pressure from us.’
Kim Stephenson, financial psychologist and author of Taming The Pound, believes this direct monetary assistance is a sign of the times.
Gifts from afar: Amy is supported by her father John who lives in Australia
‘For the past 20 years, we’ve always had expectations that we’d earn more, upsize our homes and be able to get credit or jack up our mortgages with no problem,’ he says. ‘But now there’s a realisation that we can’t do all that, hence the need to ask Mum and Dad, who traditionally did little more than help out with the grandchildren.’
It’s tricky territory though. These financial handouts can, says Mr Stephenson, cripple your confidence:
‘As a grown-up, asking your parents for help can feel shameful and demeaning,’ he says. ‘If you come from a middle-class, comfortable background, you expect to be able to provide the same standard of living for your own family, and it’s embarrassing when you can’t.’
Banking with Mum and Dad can also create tension and jealousies among other members of the family. In Amy’s case, the cash handouts have made it difficult for her mother, separated from her father since Amy was five, to handle.
‘She’s in a different financial situation and hasn’t been able to help, and I think she feels put out that my Dad and I are a bit closer now as a result,’ says Amy.
There’s a danger it can lead to emotional blackmail, too, and damage the parent-child dynamic.
‘If you have a difficult relationship anyway with your parents, they could use their financial assistance as leverage — to see more of the grandchildren, say — leading to resentment,’ adds Mr Stephenson.
My parents, already in their late 70s and 80s, have no such ulterior motive. Hanging out with my children seems the last thing on their minds as they head into their twilight years.
You could say their gifts to me are a premature inheritance that allows them to stick around and witness the rewards.
“I definitely wish she didn”t have to do this and I could stand on my own two feet”
Seeing me happier and more comfortable, and getting to share family celebrations and holidays with us — this is the richness of life, my father frequently tells me, not material wealth.
Katy Berry, a 41-year-old single mother and primary school teacher from Glasgow, knows her mother feels the same. Since Katy’s husband left two years ago, her mother, Beryl Black, a retired nursery nurse, has taken Katy and her six-year-old daughter Rachael and four year-old son Adam on holidays, including sunshine breaks to Majorca, weekends in luxury hotels and a once-in-a-lifetime trip to Disneyland Paris.
‘She didn’t want the children’s standard of life to diminish and not to have holidays, but it also meant she could come and have fun, too,’ says Katy.
‘My father died after a long struggle against Alzheimer’s disease just six months after my husband left, so, while devastated, Mum was suddenly free to do more.’
As a result of Katy’s change of circumstances, her mother became almost like a second parent, childminding and feeding her children while Katy worked part-time.
Her mother buys weekly treats of comics and toys and even contributes to the mortgage, so they don’t have to leave their lovely four-bedroom Victorian family home.
‘I definitely wish she didn’t have to do this and I could stand on my own two feet, but the truth is I couldn’t do it without her,’ says Katy.
‘She’s been incredibly generous and I know, as a grandparent, she does much more than she really should. She should be getting the good stuff and walking away!
‘I just hope the situation won’t last for ever. When the housing market improves, I’m planning to downsize so I can start managing more on my own.’
The childcare alone that Beryl provides probably accounts for around 5,000 a year, according to recent research by Post Office Financial Services. It found one-third of parents in the UK turn to their own parents, and inevitably their finances (dubbed the ‘Nan Estate’), for unpaid duties that include childminding, feeding, taxi-ing, and so on.
As far as Beryl’s concerned, she’s more than happy to keep it up as long as Katy needs it.
‘I’m not wealthy, but I’ve worked hard for 40 years and have a decent pension and a little put by, and I’d much rather give it to my family than keep it for myself,’ says Beryl.
‘In my time, people had stable jobs and there were plenty of them around. But nowadays, it’s so much more difficult. Katy is more than willing to work full time, but the job just isn’t there. I talk to my friends and many of them are helping their children in just the same way.’
While Beryl loves being able to take the grandchildren on holiday, she admits she’d much rather be lying on a sun lounger than splashing around in the kids’ pool. ‘It’s not exactly how I saw my retired life unfolding,’ she says. ‘But that’s what family is for.’
Indeed. Not many parents can stand by and watch as their children flounder into debt or struggle to buy themselves a decent house. My husband and I look at our two young sons and know, if the situation arose, we wouldn’t hesitate to do the same.
I only hope this recession is long gone by the time they’re grown up. Then, who knows Maybe they can take us on holiday.