Even before the economic turbulence prompted by talk of high tariffs imposed by the United States, it has been hard to avoid the fact that many people have been living in a fairly straitened situation for some time.

The impact is not just felt by those taking a keen interest in the world’s stock markets.

Earlier this year, various media reported that some individuals were having to remain living with their parents instead of being able to afford their own homes (https://www.bbc.co.uk/news/articles/ce8je25v6mmo).

Within the last week or so, we have seen evidence that parents do even more than providing a roof over the heads of their adult children.

New research by the estate agents Savills has found that parents are digging ever deeper into their finances to help children cope with a variety of outgoings https://www.savills.gg/insight-and-opinion/savills-news/376516/bank-of-mum-and-dad-paid-out-%C2%A39.6-billion-in-gifts-and-loans-in-2024

In all, Savills calculated that the so-called ‘Bank of Mum and Dad’ had provided £38.5 billion of assistance since 2021 – an increase of more than 70 per cent on the previous four-year period.

Although the figures are considerable, I think that we should not be entirely surprised.

Last August, my colleague Bronwyn Warmington wrote that a separate study had discovered that support from parents and grandparents was helping to fund 42 per cent of all homes purchased by individuals under the age of 55 https://hallbrown.co.uk/cohabitation-clarity-and-certainty-as-the-bank-of-family-keeps-on-giving.

It is certainly true that the rise in property prices over recent decades has put the cost of a home beyond the immediate reach of many.

Figures issued by the Land Registry only a couple of weeks ago showed that average house in the UK is now £268,000 – £13,000 higher than a year ago https://www.gov.uk/government/statistics/uk-house-price-index-for-february-2025/uk-house-price-index-summary-february-2025#:~:text=The%20average%20UK%20house%20price,to%20%C2%A3186%2C000%20(5.7%25

The amount is even higher in London, where the value of the average house stands at £555,625.

The rental situation is equally acute.

Average UK private monthly rents increased in the last 12 months by 7.7 per cent to more than £1,300 https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/privaterentandhousepricesuk/april2025.

Once more, prices in London were even higher – £2,243 on average every month.

From my experience and that of my colleagues, there are other factors, however, which prompt individuals to seek help from parents or other family members.

The rise in help from ‘the Bank of Mum and Dad’ has been partly attributed to the Government’s imposition of VAT on school fees https://ifamagazine.com/rising-private-school-fees-and-threat-of-vat-could-see-26-of-children-removed-from-private-school/.

We also often see individuals receive financial help from relatives to meet the cost of divorce.

It is such a frequent facet of my caseload, in fact, that these days it is unusual not to see a case involving some family support.

Yet I cannot stress highly enough how such generosity can come at a price.

Sometimes, gifts intended by parents for children become the subject of dispute when relationships involving those children run into problems.

Arguments that such sums should be ringfenced rather than divided along with other marital assets can fail if both spouses have benefitted. Furthermore, claims that parental contributions are only loans can be difficult to maintain.

That is because, as one notable family court ruling in 2022 decided, repayment of these amounts is not necessarily insisted upon in the same way as a commercial loan taken from, say, a bank https://www.bailii.org/ew/cases/EWFC/OJ/2022/B9.html.

In the case of cohabiting couples, who do not yet have the same legislative formula for the division of assets afforded to spouses, such matters are dealt with according to property law; namely, the Trusts of Land and Appointment of Trustees Act 1996, which is often referred to as TOLATA, for short https://www.legislation.gov.uk/ukpga/1996/47/contents.

Defending claims brought under either divorce law or TOLATA can be a complicated, lengthy and expensive process.

It is far easier, in our opinion, to regulate support from the ‘Bank of Mum and Dad’ or any other asset with a nuptial agreement (a pre-nup or post-nup) or a cohabitation agreement as well as a formal loan agreement, if that is what a contribution genuinely is.

They might seem like an unnecessary expense, especially to those keeping a close eye on expenditure while setting up home together.

However, as much as couples begin relationships in the spirit of optimism and romance, no-one knows whether they will endure.

Compared to the sizeable financial outlays and the immense emotional cost which can be result from cohabitation or divorce claims, the process of documenting respective assets at the start represents a wise investment.