The Growing Role of the “Bank of Mum and Dad” in Young Australians’ Lives

The concept of the “bank of mum and dad” has been a prevalent topic in recent years, particularly in relation to its impact on the housing market. However, a new study by Dan Woodman, Julia Cook, and Quentin Maire reveals that the financial support provided by parents to their adult children extends beyond just housing. The research, conducted on a diverse group of young Australians, shows that financial assistance from parents has become increasingly commonplace, even extending into their late 20s and beyond.

The study found that parents from various socioeconomic backgrounds provide financial support to their children, not just those with higher education and professional careers. This assistance can range from helping with basic expenses to supporting parenting and part-time work. In some cases, it is also used to pursue extended education or manage periods of insecure and poorly paid employment.

The researchers emphasize that this intergenerational support has significant social implications that go beyond just housing. It can shape education pathways, employment, parenting, and overall well-being. The growing challenges of cost of living and the impact of the housing market over the years have led to an increase in financial insecurity among young adults. As a result, the role of the “bank of mum and dad” has become more prominent in addressing these challenges.

The study highlights the need to consider whether we want the “bank of mum and dad” to continue playing an increasingly significant role in determining life chances for future generations in Australia. The researchers argue that this change is already underway, and it is crucial to address the potential consequences of this trend.

In conclusion, the study reveals that the “bank of mum and dad” is not only essential for purchasing a house but also plays a crucial role in combating financial insecurity for young adults across various aspects of their lives. The researchers emphasize the importance of considering the broader implications of this trend and its potential impact on intergenerational inequality in Australia.