Bank of Mum and Dad now UK's 10th biggest lender

The Bank of Mum and Dad (BoMAD) is now among the biggest lenders in the UK.

New figures from Legal & General have revealed that the average family contribution to first-time buyers and home buyers has risen by £6,000 in the last year alone, up to £24,100.

Parents and other family members have loaned or gifted a collective £6.3 billion, putting BoMAD 10th on the list of lenders in the UK.

The latest research from the financial services group shows that almost a fifth of over 55s (19 percent) gift money because they feel a responsibility to help their offspring or other family members, but more than a quarter (26 percent) who help out are worried about their own retirement finances.

And 15 percent told L&G that they had accepted their own standard of living would fall once they had helped their family out.

Meanwhile, many of those financing younger family members on to the property ladder are doing so through equity release, using the wealth of their own property to help out.

L&G polled 1,600 parents to reveal that more than half were using cash to help out while others were using pension funds or equity release.

Chris Knight is chief executive of L&G Retail Retirement.

He said: "There are a vast range of considerations today's retirees face when it comes to planning their finances, from whether they can afford to help their children buy a home to setting aside funds for any future care needs they may have.

"Parents and grandparents across the UK want to see their loved ones settled in homes of their own and are giving generously as part of the Bank of Mum and Dad.

"Many are using their pensions and savings to help out, and unfortunately this could be leaving some facing a poorer retirement, especially if they don't get the right advice.

"With these pressures, it makes sense that the financial services industry should help provide solutions to suit a range of circumstances."

According to L&G, there is around £31 trillion of property equity owned by the UK's over 55s.

Mr Knight added: "Not only could this wealth be transferred across the generations to provide a 'living inheritance' for children, but it could also give many retirees the financial freedom they need to enjoy the colourful retirement they really want."

Are you about to become part of BoMAD? Considering equity release to help your child or grandchild? Homeward Legal can connect you to the conveyancing expert you need to deal with all the legal work needed for equity release.

Talk to our team on - we're open seven days - or get an instant, no-obligation quote for equity release or remortgaging conveyancing now.