Bank of Mum and Dad seeking financial and legal advice

The Bank of Mum and Dad is now seeking financial advice and guidance, according to new research from Key.

The independent equity release advisor conducted a nationwide study and found that over three quarters (76%) of all parents aged 55 and over find gifting rules complicated and are concerned about making mistakes.

A further 24% also worry that that they don’t have substantial knowledge to provide the right financial decisions as the Bank of Mum and Dad.

With more than one in four housing transactions in the UK financed by the Bank of Mum and Dad, Key’s research indicated that the over-55s are looking for additional help and guidance in this area.

In fact, 40% of parents aged over 55 believe there needs to be online guidance to provide more support to help the Bank of Mum and Dad, while 78% of the over-55s would welcome tax incentives for gifting to children.

On the flip side, the younger generation are showing concerns about the Bank of Mum and Dad. Nearly half (46%) of 18 to 40-year-olds living in rented accommodation worry that their parents don’t have sufficient financial knowledge to make the right decisions and are concerned about a lack of support to help their parents get it right.

Meanwhile, 76% of those in rented accommodation want more done to assist the Bank of Mum and Dad with specific online information and guidance.

Key’s research also showed 26% of parents over 55 want to seek financial advice on how to make financial gifts while 46% want to seek legal advice but are worried it will be expensive.

“Older homeowners in the UK own as much as £1 trillion in housing wealth according to our estimates and are also likely to have generated significant pension wealth as well as other retirement savings,” said Dean Mirfin, chief product officer at Key.

He said the over-55s are right to demand increased guidance and support, and it’s clear that the vast majority would back tax incentives providing the money is used for major life events, such as a first property purchase, university fees or debt management.

“At Key, we would support any initiatives which gave clearer guidance to the Bank of Mum and Dad about the important intergenerational financial decisions,” he added.