£17 billion is gifted or loaned informally each year, almost all from parents to their adult children.
This is according to research from the Institute for Fiscal Studies (IFS)
The money they say Tmostly helps with buying a house or is gifted at the point of marriage.
These transfers they say are very unequally spread.
Most transfers come from parents aged over 50 to children in their late 20s and early 30s.
Around 30% of young adults receive at least one substantial transfer (of £500 or more) over any eight-year period.
Unsurprisingly these gifts increase inequality among the younger generation. The children of university-educated homeowning parents receive around six times more in wealth transfers during their 20s and early 30s than the children of renters. White young adults are three times more likely to receive a substantial gift than Pakistani or Bangladeshi young adults.
The research showed there was also a significant geographical divide, with those in the South West and South East twice as likely to get financial help from their parents versus those in Scotland, the North West or the North East.
Bee Boileau, a Research Economist and author of the report, said:
‘Substantial intergenerational transfers happen when people – particularly those with richer parents – are in early adulthood and are buying their first home or getting married. While these transfers are important assistance for some, they are very unequally spread. The children of university-educated homeowning parents receive around six times more in wealth transfers during their 20s and early 30s than the children of renters, while white young adults are three times more likely to receive a substantial gift than Pakistani or Bangladeshi young adults. As well as the benefits these transfers can provide, policymakers should therefore keep in mind these transfers’ potential to pass on inequalities from one generation to the next.’
