More than half us older people are bankrolling kids and grandkids

Finding it difficult to cope with rising house prices and poor pay doesn't mean young people aren't resilient — are we supposed to let them live in poverty to teach them a lesson?

Fergus Finlay and Terry Prone: In an interview promoting their podcast for and about older people, a journalist got shirty with them about how rich they were.

When Fergus Finlay and I started our podcast for and about older people, we did a fair bit of self-promotion in order to let people know about it. In one of the many interviews we did, a journalist got shirty with us about how rich we were. He told us, disapprovingly, that our generation was much richer than today’s 20- and 30-year-olds. 

Of all the questions we were asked, this was the one to which we gave the worst answers, although in fairness, Fergus probably was coherent, whereas I faffed around as if I were in a cross between a road rage incident and an encounter with an Asian hornet.

I couldn’t figure out what either of us had done wrong, but sure as hell wasn’t going to advance the Maggie Thatcher defence that I had worked hard for every penny. As a card-carrying college drop-out, I had hardly shaped the economics of the nation or influenced the impoverishment of the younger generation.

It would have been a very different conversation if the latest research from Royal London Ireland had been available back then. This is the research that found 53% of those with adult children or grandchildren are divvying up cash to those children or grandchildren.

“More than half of us older folk are using our hard-earned savings to support the next two generations,” I could have told the hack. 

“So what’s your demeaning point, then? If it’s that we shouldn’t have that money, does that mean you want our kids and grandkids further impoverished? That what you want?” 

I might further have educated him by teaching him a new term: Intergenerational financial reliance. That’s the term for what’s going on, with 15% of adults affirming they currently receive financial support from family, rising to almost one in four (24%) among those aged 34–44. 

Oh, and by the way, you sanctimonious arse biscuit, I would have added, (quoting that high-level literary figure, Kate Atkinson,) don’t miss that word “reliance” at the end of the phrase. “Reliance” is specific, whether applied to heat, light or hydration. 

Relying on someone else for any of these is not a casual surrender. It’s not grabbing a few quid for treats. It’s at a quite different and more serious level. For many, it is a survival issue. Or, as several of the people questioned in the survey put it, it allows them to “keep their head above water”. 

That means the money lent or gifted by parents or grandparents is used by almost half of recipients to help cover day-to-day expenses such as groceries, utilities, childcare or insurance. Trivial inessentials, like.

None of this was what Irish people expected when the phrase “The Bank of Mum and Dad” came into the currency at the time of the Celtic Tiger. (The British apparently generated its use a good five or more years before.) 

Back then, the feeling was the older generation could usefully shell out to help the younger generation get together the deposit on a house. Which, if we’re getting into sanctimonious arse biscuitry, is not a good concept, facilitating, as it does, transfer of wealth from one generation to the next, while, by inference, putting poverty more firmly into the inheritance pattern of those not coming from privilege.

Now, Royal London Ireland did not fail to see a moral lesson in their survey findings. Mark Reilly, its pensions proposition lead, came up trumps on that one. Having made obeisance to the increasing importance of intergenerational financial safety nets, he looked at the current property situation.

“Given the financial commitment involved in purchasing a home, it’s understandable that adult children may seek financial assistance for this, and that parents or grandparents may want to help here,” he acknowledged, before moving on to the teaching point. “It’s important, though, that the provision of such support doesn’t encourage adult children to depend on family too heavily financially when it comes to homeownership, or indeed, the basic or other expenses which arise.” 

Which raises the issue of definition. What, precisely, does “depending on family too heavily financially” actually mean? Some of us financially smart oldsters remember a time when we were so financially dependent on the bank — not having parents with spare cash to exploit — that an arriving letter with, in our case, the Bank of Ireland logo on the envelope amounted to a lethal threat rather than customer care.

Sensible old people don’t hand over what they can’t afford. Generally speaking, that is. Now, if you tell me some OAPs do hand over what they can’t afford to Nigerian princes or overseas daughters who have lost their phones, I will tell you this is true but unquantifiable. 

It may be that twice as many OAPs are financially smart enough to avoid such scams — maybe the banks could tell us the percentage of smart pensioners as opposed to gullible ones?

If, that is, any of the banks were to lower themselves to the word “gullible”, which they wouldn’t. Financial institutions who wish to insult customers — like all the big corporates — talk about resilience. 

Resilience has become the code word for managing your money, which is an important function of daily life. It may even be a virtue among the older generation, but let’s not be looking for praise, here. Later, maybe.

“Our research suggests that a significant proportion of Irish adults are not financially resilient,” says the Royal London Ireland man, criticising the many who rely on family support to cover everyday costs and stay on top of essential bills.

For once, me and Fergus Finlay might agree on a point to be made about that, said point being the people who so rely on their families just might be underpaid, rather than lacking in financial resilience. 

Or, indeed, as the Royal London Ireland comment-provider makes clear, the rise in house prices over the past two decades radically changed the context.

The thing is that walking into a national financial reality, like the rise in house prices, is not anybody’s fault. Being underpaid is not their fault either, but a dearth of financial resilience? Of that, it would seem, they are personally, lamentably culpable. Tut, tut.

“For society to progress, people need the ability to reach key milestones such as buying a first car or home, or building adequate retirement savings,” says Mark Reilly.

“That becomes much more difficult when day-to-day living depends on informal support from family. Life is unpredictable, and unexpected costs or setbacks can happen at any time. Having a solid financial foundation helps people not only manage those challenges but recover from them and move forward with greater confidence.” 

Let that be a lesson to any of you generous old folk out there. It is your duty to help society progress by telling your children and grandchildren to buzz right off and stop wanting cash from you. Poverty will add to their resilience, so it will.