British kids going to become more dependent on parental wealth...

[mids2019]

https://www.theguardian.com/lifeandstyle/2024/nov/17/bank-of-mum-and-dad-why-we-all-now-live-in-an-inheritocracy

I think this article is she opening but I think it is a reality we have with rising property prices and the impact of accumulated generational wealth.

Is there going to become an increasing acceptance that the blank of mum an dad will play a big part in children's lives and that ultimately once wealth is accrued within a family of stays there......

It's a fairly new concept to be able to buy a home and an even newer concept to have such a vast amount of wealth confined to one or two generations. What we are seeing happening is the world resetting back to how it was before the 20th century. We have become obsessed with owning something that is a human right and using it to accumulate and hoard wealth from, we shouldn't be in this position.

And he's talking about contributing to and being part of the problem.

Yeah, I agree. The aberration was the small window of time with a high degree of social mobility.

I would say this is true!

I currently put £200 a month per child in to s&s.

We will use the money to buy them buy to lets the second they turn 18.

We are hoping to pay their full uni costs too.

the govt should clamp down on rents and rental property empires. I was reading that US based corporations are buying up UK housing for the purpose of building a rental empire. there are also landlords who own hundreds or thousands of properties. the housing stock is depleted, house prices pushed up, rents pushed up, rent goes into their pockets, as does benefit paid by govt for rent support into their pockets. it's completely unacceptable.

This has always been the case. It's the plot of innumerable Victorian novels. The only new thing is that the "lower orders" (to use a good Victorian term) now have assets to leave to their children.

Don't think it started with kids. Many adults (including middle aged ones) have been waiting for their parents to die to inherit enough to buy a house or live better. Not in a sinister way but simply because it's the only way they know they can have a chance to get on the property ladder or do what they couldn't do otherwise due to financial constraints.

I can see the same here in Ireland. One of my friends got a house deposit from her parents over 20 years ago. I know a lot of people as well whose parents gave them either sites to build a house on or substantial sums of money towards a house purchase so they ended up with smaller mortgages. As a result they could save money, build up investments or buy a house for rental purposes and build up a decent pension.

I know one couple where one parent is very wealthy and they have a mortgage free home in a very nice area.
I know several people who are now in their 50's and due to this are now in good financial positions. They plan to help their kids though college so the kids won't end up taking on a lot of debt, some will try to give them a house deposit and some of their adult kids will live at home for a few years to save for a house deposit.
I know several adults who will receive substantial inheritances within the next 10 years as well due to either parents or grandparents or close relatives deaths.

I am mid 30s, worked hard in school to do everything right as I was told, do well in school and you'll be OK.
One parent died young, the other turned to drugs, hence a very disrupted youth and young adulthood.
There was no money, no driving lessons, no deposit for uni accommodation (staying at home wasn't an option when there was no home), and I was expected to just get on with it, which I did.
It became very apparent who had help from family and those that didn't. It was a choice between paying rent or eating.
Even in my twenties, working and earning, money was spent on living.
I'm just about managing now. No savings. I rent and will always rent unless I win the lottery. I still don't drive and that has massively impacted my career and jobs I can or can't apply for.
Compare and contrast to those who had driving lessons, could stay at home until in well paid grad jobs, saving all the time with mum and dad gifting them a deposit. Their accumulated wealth is hundreds of thousands more than I have.
It's so wrong on every level.

I think it’s certainly going to be the case if you want to live in the South East / other expensive areas.

It’s a significant factor in my own family size - as I am assuming I will need to fund my own children to a significant degree to afford a home of their own.

The amount of help my peers receive is absolutely staggering to me.

i think it is also a class thing. Middle / upper class families are more likely to see wealth as inter generational and invest in their children early, for example school fees, helping with university, helping with housing early.

IMO working class parents have more of a “they need to make their own way like I did” mentality and see the money as “their money” not family money.

my parents are working class but have become very wealthy and have a vehemently strong opinion that it is theirs alone and children need to “make their own way”

my friends parents have paid private school fees/ uni fees/ bought them flats at uni to live in, which they subsequently rent, large housing deposits following this , and provide huge amounts of childcare.

It is what I have experienced too.

Many of my friends who are "working class" are getting no help from their parents even though they have money. Their parents are also still working in to their late 60s so haven't been able to provide child care.

My parents who are high earner give money away to my me and my brother constantly to get rid of it before inheritance tax, help pay for school fees and spend a lot of time with our children as they both retired in their 50s.

However, both of my parents grew up in council houses with absolutely nothing but abuse and poverty. They swore they were going to give us everything they could.

@Sdpbody its very interesting and the psychology behind it is fascinating.

I think a lot of working class boomer generations really feel strong resentment about helping anybody else, even family, as they hold this strong belief that “they should make their own way/ stand on their own 2 feet”

before anyone accuses me of being grabby, I’m not, I’m aware that nothing I can do/ say will change how they feel so I don’t bother trying to convince them. But it is bizarre.

why wouldn’t you want to help you children if you had the power to?

my parents are multi millionaires and have time and money in excess but actively don’t want us children to have any help, because why should we? But they don’t want to give it away to anyone else, they don’t want to give it away in inheritance tax, so they are just sitting on it. Why? They couldn’t possibly spend it all even if they tried. They see us struggling but think it is “good for us” to struggle and learn the value of money.

conversely, my ‘posh’ friends parents are much more relaxed about money and freely give it away . Perhaps it’s being born / raised with money and the security of it allows them to be generous?

This isn’t a criticism of the working class by the way (I am WC) it’s more relevant that perhaps the class gap will get even bigger?

My boomer parents have done ok. My daughter will be relying on inheritance from them to get her own house.

It's crazy.

the thing is with inheritance is often it won’t be as useful as if parents invested in their children early.

if you give someone £20k when they are 20 years old to invest eg house deposit, they are going to be much better off later on in life if you gave them £20k in their 50s

But most people's assets are in their homes, aren't they? They don't have spare pots of cash to give away.
I am hoping my parents will live long enough that I don't need their inheritance but it can pass to my children (so, more like bank of granny and grandad).

Yeah but you can downsize and release equity

That is our plan for when our children are adults to give them a house deposit each

We wouldn't want to be in a large four bedroom house in retirement anyway

@Nespressso I saved alongside my DDs father for DD's savings but because we couldn't afford much she came out at 18 with £12k. Not enough to buy a car or have any significant impact on her university costs. Certainly not enough to put down on a flat.

The economy is tough on everyone, unfortunately.

I'm also 34 and could have written exactly this!

How depressing that what job you do/income you earn is less important than whether your parents own their home & can help you buy yours?

@Nottodaygoaway yes I totally understand that, I realise that not everyone has vast sums of equity to give. But you did give her what you could, and at a young age when she could benefit from it. Because you were trying to help her as best you could - the intent was there.

What I am saying is that for some, they don’t wish to help their children even tho they could, as their mentality is “why should i/ it’s MY money and I won’t share it/ children need to learn how to stand on their own 2 feet.”

for those who do give it to their children early this will likely mean their children reap greater rewards from it than if the parent holds onto it and passes it down decades later.

hence I think the wealth gap will become even wider.

it’s not a criticism, my children are only small but I already know I won’t be able to provide the kind of life for them that I thought I would.

The amount of help my peers receive is absolutely staggering to me.

I know people who went to private school, had help with uni, 6 fig deposits to get on the ladder & then 6 fig sums to move up the ladder &/or for renovations.

There is a clear divide between haves and have nots. We are going back in time. Children born poor today going to be much disadvantaged than previous generations.

@Preppingdonkey yes same here - as well as many of my friends got bought a house as student accommodation during uni, and they have benefited from the rent for this for the last 15 years, plus growth in equity.

not only this, but their parents take the children away for weeks during the holidays - they will go on holiday with them to Isle of Wight or Norfolk for example (all paid) and that allows the parents to work/ not need to juggle childcare and the children are happier having lovely memories on the beach with granny.

meanwhile my parents have no interest in helping, and we are juggling clubs with clearly sub par care, and the children do longer hours than they want but we have no choice. I have to restrict my hours, thus widening the wealth gap even more.