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Thursday, August 26, 2010

Bank Mum and Dad is expanding and taking market share

Aviva, the company with the dreadful insurance ads, has published some research showing the importance of parents in funding their kids. A few factlets from the research (sorry no sign on the Aviva Web site of the research report, just the press release)
29% of parents worry that further handouts will limit their retirement income and 16% are concerned they will have to continue working as a result.
20% of parents anticipate providing funds in the future with 30% adult children are relying on future support from their parents.

The FT has an article (subscription only) , based around the research that is worth a read. It goes some way to counter the tirade of “they are spending our inheritance” nonsense.

The article’s author suggests there are two types of accounts offered by BMAD

Type one: The “Forever Young” account. This is mainly opened by students and allows children to have their lifestyle funded by their parents up until they secure a job that can pay instead.

Type two: The “Help! Lifetime” account. This allows customers (kids) to go to their parents for financial help on a need-by-needs basis.

As traditional banks and building societies become more risk averse it look like Mum and Dad will play an ever great role in funding their nippers. Dick Stroud

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