The Bank Of Mum and Dad is often thought of as a bottomless pit of financial assistance for children needing a leg up after they’ve ‘flown the coop’ – but a third (33%) of parents have been under financial pressure as a result of bailing their children out financially.
Over half the parents Experian surveyed last month said their children (aged 18+) have ‘used’ the Bank of Mum & Dad an average of four times – and to the value of £6,000 – since becoming financially independent.
Some recent findings have also shown that parents will provide £5bn this year to help offspring on to the property ladder.
The slippery road to financial independence
Our research found that 41% of parents were called upon as their child had no savings to cover for an unforeseen expense, with almost a quarter (24%) admitting that their child is simply bad at managing money and ran out of money. 15% of children had to ask for help as they had got themselves into a debt they couldn’t afford to repay.
It’s tough to say no of course – and not surprisingly, 96% of parents have given their kids financial support when asked to. However, it’s left a third of them under financial pressure themselves.
72% have ended up drawing on their own personal savings or their regular income, while 14% of parents surveyed had to rely on credit to be able to get hold of the cash required.
Teaching children to become more financially independent
It seems that many ‘financially independent’ adults are still struggling to take control of their finances. With this in mind, parents would do well not to underestimate the influence they can have on their own children, teaching them to manage money well.
“Without doubt any parent would do whatever they can to help their child when needed. But when it comes to offering financial support, without giving our children the tools they need to understand and manage their money later in life we can’t assume that they will just pick it up – especially knowing that most never receive any financial education in school,” Sarah Willingham, consumer champion, mum of four and BBC Dragon told us.
Recognising the importance of helping children learn essential money management skills early in life, Experian and Sarah Willingham have partnered to develop Jangle, a non-commercial free app that has been Quality Marked by pfeg (part of Young Enterprise) the UK’s leading financial education charity.
Jangle is for children aged 7 -11 and is a fun and easy way to teach how to manage money well while helping them save for the things they want. Activities within the app have been developed to address all relevant key learning stages in financial education including the value of money, saving, budgeting and being a savvy consumer.
 All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 4240, of which 1693 were parents with children aged 18+. Fieldwork was undertaken 25th – 27th April 2016. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).