Bank of Mum and Dad to End Covid Bailouts | Personal Finances | Finance
The Bank of Mum and Dad has been working overtime, with those over 50 lending £ 8.2 billion to young family members whose incomes and livelihoods have been threatened by Covid-19. One in four have supported family members financially at some point during the pandemic, giving an average of £ 1,300 each. This was an increase of almost half from the previous year, according to a study by financial services company OneFamily, which showed that those under 30 have been hit hardest by the pandemic. . The main reason given was that young family members saw their income drop during the lockdown, followed by leave or job losses.
Matthew Ellis, director of OneFamily Advice, said that while “millennials” have been hit the hardest, those over 50 have felt a lot of pressure to support their families, with nearly half saying it took a toll. strained their finances as they plundered power and savings. accounts, borrowed from credit cards or goods sold to raise funds for loved ones.
Mom and Dad’s Bank is now looking to cut funding by £ 1.8bn to ease the burden, according to a study by Direct Line Life Insurance.
Almost two million people will receive less financial support from their families, although some parents and grandparents will compensate by volunteering their time instead, such as providing more childcare.
Across all age groups, nine million, or one in six, say the pandemic has affected their household finances, with almost half having to borrow £ 1,000 or more to stay afloat.
Vincent Guadagnino, Director of Communications for Direct Line, said the past year has brought families closer together by sharing financial support, child care and emotional support.
He said: “Covid-19 has been a difficult time but also stressed the importance of family.”
Young people, the self-employed and low-income people endured the financial hardships of the past year, official figures show.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said those under 30 were more likely to see their incomes drop or be put on leave, while the self-employed lost their jobs and often fell through the net security of government support programs: “Many have trashed their savings and 1.8 million freelancers have not been able to pay their tax bills.”
No one has been spared entirely. Even those earning £ 40,000 or more say their work has been affected.
Al Ward, head of client savings at Standard Life Aberdeen, said one of the bright spots is that those under 35 have learned the value of long-term investing.
“Britons generally feel less secure financially, but the pandemic appears to have prompted millennials to invest more in their future,” he said.