Super
05 February, 2025

Top 4 tips for the Bank of Mum and Dad

It’s no secret, it’s tough nowadays for the younger generation to step onto the property ladder. Naturally, if you see your kids struggle, you want to help them out. But is providing financial assistance going to put your retirement at risk?

There’s no official research, but the Bank of Mum and Dad is a big player in today’s financial market, with some even labelling it Australia’s 5th largest bank. Collectively, it loans about $35 billion to its offspring, which averages out across Australia to around $33,000 to help with a house deposit.

That’s a big chunk of change and perhaps years of saving, so putting some thought into the logistics can give them a leg up and help keep your retirement secure.

Here are our top four things to consider before you become the Bank of Mum and Dad. 

 

1. Know your numbers

Before you offer to help, know how much you can afford. You’ve worked hard to put yourself in a good financial situation, so you also need to consider your future along with theirs. To peek into the future, have a look at the Retirement lifestyle calculator. This can provide an estimate of your future income in retirement, and help you understand how it could affect your lifestyle.

 

2. Clear, upfront communication

Set boundaries about how and when you can help. Will your financial support be a gift, or do you expect to be paid back? Is this a one off, or can you afford to help more regularly? Having a conversation about your expectations and how this will affect your own personal finances might help avoid conflict further down the track.

3. Consider a written agreement

If you expect to be paid back, it’s a good idea to make it official with a signed and dated loan agreement. Remember to include things like the amount loaned, how long the loan is for, if any interest is to be paid and the method it should be repaid.

 

4. Seek advice

When large sums of money are involved, it’s not a bad idea to seek advice. Do you have trusted friends in similar positions? Find out how they handled the financials and learn from any mistakes they made.
And don’t forget, as part of your CareSuper membership you can give us a call for simple super help,1 or for more tailored advice you can talk to an experienced financial planner for a competitive fee.2
We’re here to help through all of life’s twists and turns, so call us on 1800 005 166.

 

1 Advice is provided by CareSuper Advice (ABN 78 102 167 877, AFSL 284443). A copy of the Financial services guide for CareSuper is available at caresuper.com.au/fsg.
2 Advice is provided by one of our financial planners who is an Authorised Representative or Representative of Industry Fund Services Limited (IFS) ABN 54 007 016 195 AFSL 232514 as specified in their Financial services guide. Fees may apply. Further information about the cost of advice is set out in the relevant Financial services guide, a copy of which is available for download at caresuper.com.au/fsg-comp-advice or by calling 1800 005 166. IFS is responsible for any advice given to you by its Authorised Representatives and Representatives.
Cook, J. & Cook P. S. (2024, March 14). The ‘Bank of Mum and Dad’ is exposing older Australians to the risk of financial abuse. The Conversation. The ‘Bank of Mum and Dad’ is exposing older Australians to the risk of financial abuse.
Binsted, S. (2024, October 17). Bank of Mum and Dad statistics 2023. Finder. Bank of Mum and Dad statistics 2023.

 

 
Information correct as at 15 November 2024.

 

 
⚠️   Notice: We are experiencing high call volumes. If you are having issues logging in see our guide to getting back online. ×

CareSuper app

Download the CareSuper app and manage your account on the go!

Available on the Apple App Store Get it on Google Play