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More than half of young people in the UK say financial support from their parents comes “with strings attached”, according to a survey commissioned by law firm Charles Russell Speechlys.
Fifty-six per cent of the 2,000 Gen Z adults polled said financial gifts from their parents came with conditions or restrictions, which might include seeing entrepreneurial children’s business plans, or asking unmarried children who were buying properties with their partners to sign cohabitation agreements, the law firm said.
The Opinium-conducted poll found that just under half of Gen Z (those born between 1997 and 2012) felt obliged to follow parental guidance when buying a house; about 40 per cent felt the same way when it came to wedding planning and starting a family.
“There’s always a tension when you’re trying to manage relationships in a family and there’s money involved,” said Sally Ashford, partner at Charles Russell Speechlys (CRS).
More than two-thirds of the young adults polled said it was likely they would rely on support from their parents for significant life expenses, such as buying property, planning a wedding or buying a car.
In the UK, first-time buyers in particular have come to rely upon parental wealth as rising prices have left all but the wealthiest struggling to buy property without support. In 2023, nearly six in 10 first-time homebuyers received family assistance in getting on to the housing ladder, according to estate agent Savills.
Ashford said parents often placed conditions on the gifts they made “to protect assets, not to stop children being able to use them. They want to make sure that if something goes wrong in their relationships or their lives, [the assets] aren’t lost for the family.”
Problems could arise over concerns that children might go “off the rails” and misuse the money or among “siblings of different ages who need money at different times”, she said. Ashford added that children’s partners could also be a source of tension, especially when they “came into the family with less wealth”.
For those whose children want to buy a property with their partner, declarations of trust — legal documents that record the terms of ownership — can prove useful, CRS said. However, in the case of divorce, the family court does not have to divide the ownership in line with the declaration of trust.
Advisers say parents should start talking about the family wealth early to avoid tensions later. Conversations could start “at the dinner table”, said Iain Tait, head of the private investment office at wealth manager London & Capital. “Don’t bottle it up, because the longer you leave it, the more difficult it becomes.”
Ollie Saiman, co-founder of wealth manager Six Degrees, said parents could teach their offspring the value of investing while protecting their assets by putting money into children’s pensions. Parents can put up to £2,880 each year into a junior self-invested personal pension (Sipp) and receive a 20 per cent top-up in the form of tax relief from the government.
“By gifting into a Sipp you’re effectively creating an investment portfolio for the child that they can see but can’t access until they turn 57,” said Saiman. “It can help them start to get to grips with what happens to money when you invest it.”
Tait said parents thinking about gifting should consider their children’s feelings. He gave the example of a child who has worked hard to built up a deposit for a house, and then has a large amount donated by a parent. “Feeling like you need to move into a framework created by your parents can be quite difficult,” he said.
