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......

@ToBeOrNotToBee very similar situation for me too, it's so hard and the older I get the more angry I feel.

@Nespressso it's interesting in that I agree with you that my posh friends got much more financial help but I would say it's my working class friends/acquaintances who get far more help with childcare

This is exactly it. For things like buying a house, it now doesn’t matter if you do brilliantly at school and university and get a well paying job, because the person with the inheritance will always outbid you.

Or even if you can buy the house, you’ll have an enormous mortgage and they won’t. So they can do things like send their kids to private school and pay for extra tutoring or whatever which then perpetuates the inequality. And of course they can hand over a bigger inheritance to their kids.

As a pp says, social mobility has rolled right back - we are back in the pre war era in social mobility/inequality terms and are headed towards Victorian levels.

Personally I think the govt should introduce CGT on gains on homes, but do it gradually and with warning. You’d get a lot of house sales in the short term trying to beat the incoming taxes. And then long term with CGT on gains on your residence (like on other investments) it would no longer be seen so much as a piggy bank but as a home. And of course, it would raise a whole load of money to prop up the various state systems that help reduce inequality (like decent state health and education provision).

To be honest, I don't think there's a massive problem with saving money or sharing money with your kids. I think that we should all be able to save enough to be able to dish out 10-20k here and there as our kids reach life milestones.

It's the fact that people can't that is the real issue, not that many people can and do.

Everyone should have generational wealth to some extent. Housing and salaries prevent that.

Nothing new. Back in the 80s when I bought my first flat my parents gave me the deposit. My friends DD just bought her first flat (six times what I paid in a worse area) with help from a family member.
Main difference was back then, even in London, a young couple or two friends, on a middling salary, could manage it between them without help. Today you'd have to be earning loads more (I was an art junior when I bought, earning not that much. My friend's DD works for a US law firm).
Even with inheriting my kids don't have a hope in hell of buying the kind of house they grew up in unless they marry wealth. Splitting my house between two (and after inheritance tax) and they'd be lucky to buy a one bedroom each. Still, that's better than most.

Parents help their kids… at least ones who are able. Financially, emotionally. Even if like the Gallaghers on “Shameless” helping their kids cheat the benefits system .
It’s nothing new, parents help kids move to first flat, give them stuff, help eith home deposit if they can ….

Then in parents later years, the kids help the parents as they can.

Stupid Guardian think they’ve just discovered this?

I know a 40 something still at home. Her parents are very wealthy but they keep telling her she will be fine once they pass as she will also become wealthy due to what she inherits. Yet in reality, she will be hit with a huge inheritance tax bill and so surely would make more sense to free up the money now. I don't get parents who can help their adult children now but choose not to do so until they pass. I would rather my kids were settled and secure.

Splitting my house between two (and after inheritance tax) and they'd be lucky to buy a one bedroom each. Still, that's better than most.

How many dc do you have?!

@Augustus40 "We are both going to start doing bitcoin"

I wouldn't buy now if I were you.

@minipie I sort of agree with you re CGT on housing - I live in a village where house prices have x10 in the last 20 years. People who bought for £150k in the 90s now have homes worth millions.

however - I think introducing CGT would make it less likely for boomers to downsize, and there be less family stock on the housing market, thus potentially keeping prices high.

@InThePinkScarf my parents are like this. They are sitting on literally multi millions, about half inheritance from my grandparents, and half self made. They have everything they could ever want and need, and couldn’t possibly spend it all even in they tried.

they are in good health, and they are bored. They do very little but ‘potter about’ and tell me how bored they are.

but they won’t visit, and they won’t offer any financial help even tho they see my struggle. I don’t understand it and I think it’s just selfishness to be honest.

I really don't understand it. If you have the means to help now why wouldn't you ? I can't imagine wanting to keep my adult DD at home when I know she would be hit by a huge inheritance tax and miserable for years staying at home with us.
I agree that it's selfish and also misguided to wait until death to help.

I'm not sure if it's as predetermined as this?

Might not be directly relevant as I'm in Ireland not Britain but both myself and my ex hubby had no help whatsoever (me immigrant from a poor country, him from a very very small farm background with his mum working in a supermarket).

However we managed to buy a home and cars. We had been very frugal tho.

@Nespressso I think people get older & can get more anxious & want to keep it in case of care needs etc

This has always happened in the upper classes. It's just now happening more in the middle classes. Realistically though, future generations will be so busy keeping themselves afloat that they won't have much to pass down. Some folk already don't have much in the way of assets.

I do think some older folk just don't realise how ridiculously hard it is now and think that younger folk just cannot manage their money.

I worry about this every day. As my mum gets older and has nothing to her name, I think about the costs of looking after her once she retires at the same time as the costs for my DCs as they enter adulthood. I don’t know how I’m going to cope.

My dh owned a house in a cheap area (at the time) in the SE. He bought 25 years ago with no help from his parents. We then moved several times and relocated to somewhere cheaper and we were mortgage free when I was 38. But we're not moving, our house is very modest and nothing to really downsize too. We've one dc so when we die she'll get what's left (after care fees etc). My parents and PIL both own houses (one in SE so worth about 600k) and it's likely we'll inherit something, but as we don't need it it'll go into a pot to give to my dc to help her on the property ladder. So bank of granny and granda.

If they don’t want it to go to hmrc inheritance tax, they better start spending! :)

This has only happened because all of the council properties have been sold off. On one estate in London, people have bought their flat, sold it shortly after and moved to the seaside making a nice profit.

The people buying the flats are (mostly) all landlords getting a huge portfolio and renting out to students at the local university. All that has happened is that families can no longer afford to rent there and it's mostly taken over by students as they can get 3-5 living in a previously 2 bed flat have had been jiggled about inside to maximise landlords profits.

I don’t know anyone here in the SE who bought a house without their parents or grandparents help. It’s simply not possible, unless you have massive salary. Even if you save the deposit, the multiple of your wage to get the mortgage required will get you. That’s why the inheritance tax stuff is frustrating when some people assume children will be out splashing the cash with it ,when actually they are likely to use it to put towards a modest place to live!

This is why it's crazy that people get judged for still living at home.

🤷🏽‍♀️ what's new? It's always been that way.

Anyone with bank of Mum & Dad in the background has always had a better financil start in life... the rest of us just have to work that little bit harder, hope and pray that it's enough.

I see it with DD who is currently at uni. Many of her friends have invested part or all of their student maintenence loan & bursary as a security for after university. While the parents pay for rent and food for their DC.
One (Irish) student is completely funded by the parents.

I wish, I was able to do the same

@LoquaciousPineapple exactly I’m the only one of my friends who didn’t learn to drive at 17 (couldn’t afford it), had no help with university and had no help with a house deposit. These friends with well off parents are all massively more comfortable than me despite me earning more (and working much harder IMO)

I'm 45 and most people I know 35-50 haven't needed parental help to buy property, and we're in London. But we are Asian and from a poor background, and it's more common for families from our background to live at home, or for married couples to live with parents for free/board, to save up, and to live at home during the uni years. Which is obviously parental help in some form, but most families we know weren't in a position to give a cash handout, and the living conditions were often very cramped (sometimes still sharing bedrooms into their 20s/30s).

I know quite a few people who have got council tenancies due to difficult circumstances (I grew up in a council flat and had a few relatives who lived in one too), most of whom have bought it under RTB (2 of them put in applications in the past month to catch the bigger discount before it was cut).