There's no 'bank of mum and dad': What it’s like to be richer than your parents
Young people’s reliance on the ‘bank of mum and dad’ is often talked about, but what happens when your parents earn less than you do?
I remember when I first realised that other people’s parents had more money than mine.
I’d just started at university, and like most students, was adapting to life outside my parents’ home and managing my own money. When my tuition fee loan came into my bank, it was almost immediately gone to pay the course fees, while my maintenance loan and bursary covered my rent.
I applied frantically for part-time jobs but had no luck, and bemoaning my skint status one night to friends, one casually mentioned that his parents paid all of his rent. My stomach lurched – it had never occurred to me that anyone’s parents would have that much spare cash. I was naive, and money was never abundant during my childhood. I never went without, but there weren’t a lot of luxuries.
It wasn’t until I got my first full-time professional job aged about 25, that I realised I earned more than my parents. My dad commented that when he was that age, he hadn’t earned as much. A few years later, when his car was broken beyond repair, I offered to help him out towards a new one.
The assumption that we all have a ‘bank of mum and dad’ to fall back on exists. I’ve had housemates casually suggest that my parents cover my rent so I could have a break from work when I was suffering with depression, and estate agents ask if “my dad can throw me a few more grand” when I was looking to buy a flat - something I realise I’m very privileged to even be able to think about.
I’m an anomaly for my generation, though. Research indicates that millennials (that’s generally people born between the 1981 and 1996) are the first generation since the second world war to be worse off than the previous one. We’re less likely to own a home, with just over 40% of people aged between 25-34 being homeowners in 2011, compared to over 65% in 1991. For generation Z (people born between 1996 and 2015), the decrease is even more stark – over 35% owned homes in 1991 compared to just 10% a decade later.
Earnings, too, aren’t rising like they used to. A report released last year by the Institute of Fiscal Studies found that people born in the 1980s had lower incomes in their 30s than the previous generation. Again, this is the first time in five decades that wealth has decreased, rather than increased, for a generation.
This coupled with rising unemployment for 16-to-24-year-olds as a result of the pandemic, it’s probably not surprising, then, that some young people rely on financial help from their parents. The ‘bank of mum and dad’ is a commonly-seen phrase in news reports, but what about when mum and dad don’t have anything in the bank – or even need financial help from their children?
Being richer than your parents isn’t a situation that’s often talked about, but for me and others, that’s the reality. It can cause disappointment, awkward conversations and often no conversation at all.
I spoke to three people who share their experiences about earning more than their parents.
‘My mum’s money is hers, and mine is mine’
“I moved house recently, and because I hadn’t started my new job yet, they asked me to get a guarantor,” says Alana*, 23, from Glasgow. “I didn’t have anyone – I don’t want to put my mum in that position, because she’d be liable if any of the other housemates couldn’t pay.
“My share on its own is £700 a month and she couldn’t afford that. I didn’t have any other family to ask either, and I wouldn’t want to ask someone else to be responsible for my finances.”
Alana’s dad wasn’t on the scene when she was growing up, and didn’t provide any financial support.
“We lived with my gran until I was about five and then my mum bought a house,” she says. “She didn’t struggle to pay for the house but I knew we didn’t have as much as other people. I feel like I could ask my mum for money if I needed it, but I don’t want to, because she doesn’t earn as much as I earn now and it’s her money she’s worked hard for. But it’s good to know the option is there.”
Alana’s new job pays £21,000 plus London weighting, which is more than her mum’s salary. “I was surprised my mum still earns less than me,” she says.
Growing up, she always had a strong sense of needing to financially support herself.
“I used to get EMA (Education Maintenance Allowance), it was £60 a fortnight. I got a job when I was 16 as well, and ever since then I’ve never asked for anything. My mum did have to help me about a year ago with some rent money when I moved to London, she gave me £400, but that meant I didn’t get anything for Christmas that year.”
Ever since she began earning, Alana paid £100 monthly to her mum towards rent. When she decided to do a masters, she funded it herself.
“It was £10,000, I got £3,000 worth of grants then I sold my car and used savings for the rest. I was working all the time in a minimum wage job,” she explains.
“I see it as her money is her money, and my money is mine. I have a lot of debt like my overdraft and a credit card that she doesn’t know about, and I don’t think I’d talk to her about it either. I wouldn’t ask her about her finances either unless I thought she was really struggling.”
‘My parents hate me financially helping them’
Others, like me, first realised the reality of their situation at university.
“I’m from a small council estate in Middlesbrough,” says Ethan*, 23, whose current salary in a graduate job is more than that of his parents – his mum is a carer and his dad can’t work due to health issues. “I swam when I was younger so I had exposure to some middle class people, but I didn’t really notice anything different until I went to study in Loughborough.
“When I joined the university swim team, I saw for the first time that it’s a very middle class sport. Everyone had brand new kit except me. You don’t notice that you’re working class when the only thing you see around you is people like you.
“Between second and third year, people were going on a placement year, I didn’t have a clue what that was! I was the first to go to uni in my family so I kind of freewheeled.”
Ethan noticed that people who could access financial support from their parents could sometimes have a tendency to assume everyone had that option.
“I got a good [work] placement, and ended up being able to pay for a three-week road trip with one of my friends round the US which I’d never had the opportunity to do before,” he says. “All of our holidays growing up were in the UK. Even while planning that, one of my friends suggested getting mum and dad to help pay for it.”
For Ethan, the realisation that his financial situation was different from his peers was slow.
“There was never a single moment where it clicked, it was more of a gradual realisation,” he remembers. “People’s summer holidays, where they’d say they were going on a yacht around Turkey or something. I paid all my own rent at uni, and people would be like, ‘how do you manage that?’ It was something I noticed in the first semester.”
Sam*, 23, says his background has made him more frugal, even though he now earns what he calls “a significant amount” working for a US tech company.
“Having not come from the most well-off background, you learn to be very frugal with money and where you’re spending it, and that’s carried over. I’m still very reluctant to spend much more money than I need to, most goes into my savings,” he says.
When Sam’s dad left when he was a child, his mum suddenly had to pay the mortgage alone. “I wasn’t initially in a position where we were poorer than most people, but suddenly my mum had to pay for everything from her part time job,” he says.
As well as moments of feeling alienated among friends who have access to more money, there are other, more awkward realisations.
Sam is careful not to brag about his financial status – in fact, he prefers people not to know what he earns, he says. He struggles to find the words to describe how his career trajectory has distanced him from people he knew at school, and it’s clear he doesn’t want to come across as self-congratulatory.
“I went to a comprehensive school, and nobody was particularly well off,” he explains. “We all studied quite similar things but one of us has taken one path that resulted in one thing, and others haven’t got that. I feel they might be a bit jealous of the opportunities I’ve been given. I wouldn't have said the school was a particularly good one, but I very much landed on my feet where a lot of people didn’t.”
While Sam and Alana’s mums own their homes, Ethan’s doesn’t, and ensuring his family is financially comfortable is one of his aims.
“My drive is to help my parents out when they’re older. I said that in my interview for my graduate role - ‘I want to buy my mum a house’, she doesn’t have a mortgage,” he says. “I think they liked that, and it helped me get the job.
“I probably will have to, because her pension’s rubbish. My dad can’t work because of health issues so I’ll have to help him as well. I imagine I’ll be contributing to my younger sister’s university fees as well.”
It’s Ethan’s choice to look after his family money-wise, but that doesn’t mean it doesn’t cause friction: “My parents hate it, I think it’s a sense of pride. But I’d be worried if I hadn’t pushed myself career-wise enough to be able to help them.”
We might hear about the bank of mum and dad increasingly regularly, but the coverage makes those of us who don’t have it to fall back on very aware of our circumstances. It’s a complicated situation to be in, with conflicting feelings of pride, obligation and and even guilt, as Sam’s preference not to talk about his earnings shows. But just like the parents who help their kids with money, we’ll be willing to step in to help our families if they need it.
*Names have been changed