"Collectively BOMAD is a major UK financial institution but one that needs advice and guidance so that parents feel empowered to make the right financial decisions"
Its study found that over three quarters (76%) of all parents aged 55 and over find gifting rules complicated and are concerned about making mistakes with nearly a quarter (24%) worrying that they don’t have the financial knowledge to make the right financial decisions.
With industry figures showing that more than one in four housing transactions in the UK are financed by BOMAD, Key’s research indicated that the over 55s are looking for additional help and guidance in this area.
Two-fifths (40%) of parents aged over 55 believe there needs to be more support to help the Bank of Mum and Dad by offering online guidance. In addition, 78% of the over 55s would welcome tax incentives for gifting to children providing the money is used for major life events, such as a first property purchase, university fees or to clear debt.
Concerns are also by the younger ‘generation rent’, with 46% living in rented accommodation worry that their parents potentially don’t have sufficient financial knowledge to make the right decisions as Bank of Mum and Dad. Over three-quarters (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 shows over a quarter (26%) of parents over 55 want to seek financial advice on how to make financial gifts and that 46% want to seek legal advice but are worried it will be expensive.
Dean Mirfin, chief product officer at Key, said: “Collectively BOMAD is a major UK financial institution but one that needs advice and guidance so that parents feel empowered to make the right financial decisions for themselves and for the next generations.
“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. The challenge for parents wishing to lend or gift money is to decide which assets are the most appropriate and most tax-efficient for gifting. We believe advice is key.
“The over 55s are right to demand increased guidance and support and it’s no surprise that the vast majority would support tax incentives providing the money is used for major life events, such as a first property purchase, university fees or debt repayment. At Key, we would support any initiatives which give clearer guidance to the Bank of Mum and Dad about the important intergenerational financial decisions.”
