Parents are increasingly coming to their children’s financial aid, says Nibud, the Dutch National Institute for Family Finance Information. Nibud bases this conclusion on its recent survey on financial relationships between parents and their adult children, commissioned by ABN AMRO. The economic crisis has in no way reduced parent-to-child money transfers. In most cases, amounts are given not on a regular basis, but when the need arises.
Of all parents, 51 per cent indicate that they help their children out financially. That is a significant increase compared to 2010, when 41 per cent came to their children’s aid. Over three quarters of parents states that the economic crisis has not influenced the financial relationship with their children. In by far the most families, parents help out on an irregular basis, by giving or lending money when the child needs it or asks for it.
The 'M' word
Talking to one’s parents about money does not come naturally in every family. Of all children surveyed, 42 per cent stated they never discuss their financial situation with their parents. ‘Our research shows that money is not a common topic of conversation at family get-togethers. A pity. If you know about each other’s financial situation, you can support each other and prevent misunderstandings,’ says ABN AMRO’s Director Retail Paulus de Wilt.
‘Gift not necessary – but appreciated’
Other than lending them money or handing them cash, another way to support children financially is officially gifting them, thereby taking advantage of gift tax allowance. The children mainly transfer these single or annual gifts to their saving accounts (30 per cent), use them to buy a home (26 per cent) or put them into renovation or improvement of their house (21 per cent). Just over half of the children stated they felt the gift was ‘not necessary, but appreciated’. And 8 per cent expect no less than to get money from their parents.
Having a will drawn up is not quite the norm yet. In total 44 per cent of parents has a will, of whom 70 per cent want the entire inheritance to go to the surviving partner. Notably, over 38 per cent of wills exclude sons- and daughters-in-law from the inheritance.
This survey on the financial relationship between parents and children is a repeat of an earlier one performed by Nibud and commissioned by ABN AMRO in 2010. The underlying question this time was whether the economic crisis has influenced this relationship.