Bank of mum & dad supporting adult children

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From buying a home to help with the groceries, the “Bank of Mum and Dad” is in full swing in New Zealand, according to new research by global comparison site Finder

A nationally representative survey of 1,507 Kiwis found more than half (51%) of parents with children aged 18 and over help them out financially. That’s equivalent to more than 1 million parents dishing out money to support their children. 

Paying for groceries is the number one way parents are lending a helping hand to their children, with 44% saying they buy their kids’ food.

Nearly a third of parents (31%) allow their adult children to live at home rent-free, while 22% charge discounted rent.

Nearly 1 in 5 (19%) say they’ve given their children money or a loan for a home deposit, while 9% say they acted as guarantor on their adult kid’s home loan.

Angus Kidman, Finder’s editor-at-large in New Zealand, said rising property prices have made the bank of mum and dad a more attractive lender than ever before.

“Many young Kiwis rely on parental support to help them get onto the property ladder.

“A little help now can mean a lot later. Paying your kids’ bills or providing free accommodation in early adulthood will help them build wealth early on.

“For those on lower incomes or who are still finding their way in life, this kind of support is crucial.

“Even non-financial support – like going guarantor on their home loan or providing free childcare – can be a major help.”

The research found mothers (55%) are more likely than fathers (47%) to give their adult children financial support.

However fathers are more likely than mothers to help pay for their children’s car (22% compared to 9%) and assist with mortgage repayments (12% compared to 3%).

Kidman said it’s important not to let the lending get out of hand.

“Helping your children save for a home or paying for their education is great, but make sure they know this support won’t last forever.

“If you’re helping your kids pay their bills, but they’re spending all their money on clothes or enjoying the unemployed life, you aren’t helping them learn about money.

“Talk to them about budgeting and spending responsibly. Perhaps you could continue to support them, but with the expectation they pay you back.”

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