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4 February 2023

Boomers’ generosity to their kids is warping British society

The Bank of Mum and Dad has been brilliant – for those who have access to it.

By Jonn Elledge

The thing about boomers – the thing that no one ever says about boomers – is that they’re just so generous. The generation born between, roughly, 1946 and 1964 get a lot of stick: for being on the lucky side of the housing crisis, for feeling and acting entitled, for having voted to deny to their children a lot of things (free higher education, a European passport, a functioning welfare state) that they enjoyed themselves. But what we hardly ever acknowledge is quite how endlessly giving they are.

This week has brought two separate reports highlighting the full extent of boomer generosity. The first was a column by the Financial Times‘s economics editor, Chris Giles, with the – admittedly, pretty banging – headline of: “OK boomer, you’re more generous than we thought.” In it, he counts up the value of financial transfers between old and young: the £100bn a year that, according to Imperial College research, “flows down the generations in the form of bequests”; the £11bn of “lifetime gifts”; the unpaid childcare (£132bn) and social care (£57bn). This £300bn of “private welfare”, he notes, is “more than the public welfare bill for pensions and other social security of £261bn in 2022-23”.

Then there was the nauseatingly named Saltus Wealth Index report, which the Telegraph calls a “a bi-annual barometer tracking the confidence and concerns of high net worth individuals”. This found that it’s no longer merely investment-shaped things like housing deposits that comfortable 60ish parents are being forced to assist their offspring with: it’s basic living costs like energy bills and transport costs, too. Just 13 per cent of those surveyed said they were providing their children with no financial support. “I’ve had two clients who have actually delayed their retirement,” added the report’s author. Imagine the tears that the generations struggling to attain either houses or pensions will shed over that.

Actually that description is not quite fair because, if the last two paragraphs have told us anything, it’s that not everyone in those younger generations is struggling in quite the same way. Many older people are, indeed, extremely generous – but not everyone stands to benefit. The longer the problem of intergenerational unfairness persists, the more it will transform into one of intra-generational unfairness.

I am only a millennial on the absolute, most generous of definitions; I am certainly not in the age group most people imagine when they hear the word, and should more correctly be described as a Xennial, except for the fact that nobody can pronounce that and so I am not. Whatever I am, though, I should confess: I have been a lucky and grateful client of the Bank of Mum and Dad. The support and generosity of my mother enabled me, in my early 20s, to do internships and take a master’s degree, rather than just grabbing hold of the nearest job. Inheritance from my grandfather enabled me, in my late 20s, to buy my first flat, and to spend the next decade writing furious columns about the housing crisis in an attempt to alleviate the guilt that I had not in any way earned this.

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My good luck doesn’t just lie in being from a moderately affluent background: it’s also being an only child from a small family, based in the suburbs of London (so if the worst came to the worst I could always go home), with an incredibly and instinctively supportive mother (to whom I will be forever grateful). But the net result of all this is that I have been able to take risks many others could not. It isn’t just the actual money: it’s the security of knowing that there was only so far I could fall.

But I know there must be ways in which I have benefited of which I am blissfully unaware, and so I asked some friends what I might be missing. “Hahaahahahahaah,” replied one. “Oh god, you’re going to get about five million words.”

“Do you want me to be general?” asked another. “Or scathing in your direction?”

What is it that those of us who have won this particular lottery do not understand? Not needing to work through university. Not having the “constant, gnawing rat of worry in the stomach” about delayed payment of invoices meaning that bills start to bounce and the overdraft fees add up. “People tend not to understand how much a small financial shock can f*** you when you don’t have parental money,” said one. He cited an occasion on which he’d locked his keys in his flat and slept on a beach because he couldn’t afford the fee his landlord charged for replacements.

What’s more, in a phenomenon no wealth management firm has yet produced a report about, several of my friends now send money home. “It’s not just absence of advantage,” said one, “it’s an active disadvantage.”

This is the problem with relying on private welfare: it means the uneven distribution of wealth and luck in one generation will largely be passed down to the next. Relying on private support doesn’t just mean depriving people of opportunities and security. As younger millennials reach 30, it’ll increasingly affect even such basic things as who can afford to have kids.

And, at risk of handing anyone who wants to beat me a stick, there is no reason to think that those who benefit from this system will be the best or the brightest or most talented.

I will be eternally grateful for the Bank of Mum and Dad. I try never to forget my good luck. But there is a reason we replaced patchy, Victorian philanthropy with the universal safety net of a welfare state. If the boomers really were as generous as all that, they’d want the state to provide opportunity for all.

[See also: Boomers can’t believe their luck – so they claim it was all hard work]

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