Bank of Mum and Dad: why we all now live in an ‘inheritocracy’
Family wealth dictates our life choices. So is the Bank of Mum and Dad now behind so many of society’s growing inequalities?
//Summary - Level-C2//
The article critiques the rise of "inheritocracy," where parental wealth increasingly dictates life opportunities, exacerbating societal inequalities. Dubbed the "Bank of Mum and Dad," family financial support underpins housing, education, and career choices, creating stark intragenerational disparities. Economic shifts since the 1980s, accelerated by the 2008 crisis, have made wealth inheritance central to mobility, replacing merit-based success. This dynamic limits independence fosters resentment and perpetuates privilege. Cultural differences, social care costs, and inheritance taxation complicate the issue, yet the unequal transfer of wealth continues to entrench inequality. Addressing these systemic challenges requires confronting the taboo around inherited privilege.
1)
You know the Bank of Mum and Dad when you see it: it's your friend who seems broke but always has a safety net or who suddenly (but discreetly) comes up with the deposit for a house. It's those who stayed with their parents while they saved up for a place of their own or stuck with a job they loved despite chronically low pay. Those who don't have to consider the financial cost of having children. It's those whose grandparents are paying for nursery or university fees, with the bank of grandma and grandpa already driving an economic wedge between different cohorts in Generation Alpha (born between 2010 and 2024) and Generation Z (born in the late 1990s and early 2000s).
2)
This is the picture we know, but the Bank of Mum and Dad is not just a luxury for the 1% - it is also evident in families like mine. I grew up in a working-class household and was the first in my family to get a degree. Still, the fact that my parents had scrimped and saved to buy properties in London in the 1980s (and allowed me to crash into one in my 20s) was arguably the natural source of opportunity in my life.
3)
My parents were subversive punks whose working-class roots meant that getting ideas above one's station never wore off. My great-aunt was a Pearly Queen, and we all stood around the piano and banged out. Maybe it's Because I'm a Londoner. But inspired by Thatcher's vision of a property-owning democracy, my parents invested in two houses in Tooting in the 1980s and, crucially, held on to them. By the turn of the millennium, they were sitting on property wealth that had appreciated at a rate they could never have imagined. When the global financial crisis hit in 2008, my parents had become paper millionaires. It was a level of wealth they had never expected and one that we, as a family, only came to terms with when my father died in 2018.
4)
But is this the real story? Or have I just fed you a "working class has done good" story because that's how I try to justify my own extremely privileged position? One academic study of the Bank of Mum and Dad found that its beneficiaries tended to see this considerable financial support not in terms of their privilege but as evidence of their parent's hard work and upward mobility. Where once parents lived vicariously through their children's successes, now it seems their children live vicariously through their parents' struggles. And therein lies the problem.
5)
Recently, we have rightly expanded the conversation about privilege in society. Yet how honest are we about one of the most apparent forces shaping anyone under 45: the presence or absence of a parental safety net? The truth is that we live in a meritocracy. If you've grown up in the 21st century, your opportunities are increasingly determined by your access to Mum and Dad's bank rather than by what you earn or learn. The economic roots of this story go back to the 1980s, but it accelerated after the 2008 financial crisis when private wealth soared and wage growth stalled. In the 2020s, we have moved from a meritocracy - where hard work pays off - to a meritocracy based on family wealth.
6)
The frustration of young people today is so pronounced because this reality is at odds with what we were told when we were growing up. The message then was: work hard, get a degree, and you will be rewarded. Education became increasingly focused on exams and qualifications, with few options for those not suited to the system. But as more and more of us graduated, the price of a degree went up, and its value went down.
7)
It became increasingly about our parents' ability to 'invest' in these talents as the natural source of opportunity and the critical determinant of our class, status and success. Becky O'Connor of pension provider PensionBee tells me: "Parents have become the gatekeepers to their children's adulthood, with the previous generation's level of wealth ultimately determining which milestones are achievable and which are not". Inheritocracy is the driver of milestone culture.
8)
For a long time, much of the intergenerational debate focused on how lucky the baby boomers were and how unlucky the millennials were. This duality isn't just unhelpful; it's increasingly untrue. In 2010, David Willetts wrote The Pinch, an economic dissection of baby boomer privilege and millennial hardship that would become a narrative for millennials frustrated by the level of intergenerational injustice. But when I spoke to Willetts, he acknowledged that the dynamic had changed in the last 10 years. It was no longer about intergenerational unfairness but intragenerational unfairness, with the new culture of dependency within the family stifling social mobility. "It makes the family more important," he said. But Willetts's framing here is essential because what some describe as the growing 'importance of the family' is what others call the unfair privilege of birth.
9)
For a long time, much of the intergenerational debate focused on how lucky the baby boomers were and how unlucky the millennials were. This duality isn't just unhelpful; it's increasingly untrue. In 2010, David Willetts wrote The Pinch, an economic dissection of baby boomer privilege and millennial hardship that would become a narrative for millennials frustrated by the level of intergenerational injustice. But when I spoke to Willetts, he acknowledged that the dynamic had changed in the last 10 years. It was no longer about intergenerational unfairness but intragenerational unfairness, with the new culture of dependency within the family stifling social mobility. "It makes the family more important," he said. But Willetts's framing here is essential because what some describe as the growing 'importance of the family' is what others call the unfair privilege of birth.
10)
At a time when the market has become dysfunctional, and the state has retreated, the family has risen. It is a dynamic that the economist James Sefton calls "good parents, bad citizens". And it's a dynamic that has opened up unimagined opportunities for some. In a meritocracy, certain advantages do matter: those whose parents are together, those who live in the South East, those who are only children, those whose parents can 'gift' an early inheritance and, to be blunt, those whose parents do not live very long or have complex, expensive care needs. Knowing that my own story was a uniquely London-centric, female, white, privileged experience, I set out to discover this mosaic of family stories across Britain.
11)
I spoke to Tom, 34, who had been supported through private education and Oxford but had mixed feelings about the springboard his parents had given him in his 20s and 30s when they indulged his dream of becoming an actor. "I moved into my mother's flat in central London, which she had freed up from her job. I was fully funded," he admits. Tom earned money during this time, but "it was about earning enough to maintain a bit of respect, nothing substantial". After seven years of trying to carve out an acting career, Tom decided to call it quits. Looking back, he now regrets that period of his life. "I was just so bloody lazy. I wish someone had told me: 'You should be earning more money; you have a lot of advantages. I didn't use them properly. I see that as a personal failure. Now married and a father, Tom laments that he will not be able to recreate the life his parents gave him for his son.
12)
If Tom were an inheritor, I would speak to many meritocrats who had made it in modern Britain with little parental help, but this came with resentment. Greg, 31, describes himself as a working-class boy from Surrey. He grew up in a single-parent household, and when he was 16, his mother told him that if he wanted financial freedom, he would have to work for it. Greg graduated from a top London university and found himself on a graduate scheme in London, tutoring rich kids on the side, something he ended up resenting. "I went to counselling to get over my anger at other people's wealth and family support... I was tutoring all these wealthy kids who had it all, and I found it quite depressing because here I was, scrimping for £100. I felt like the underclass. I couldn't help but see the irony of my pupil paying me £100 for private tuition, and I gave it straight to the therapist to help me cope!
13)
When it comes to class, social mobility and wealth, we tend to see it through a very British prism, when the ban on Mum and Dad is an international trend but also one that differs across cultures. This is something that Alina from Mumbai, who now lives in London, recognises. Alina tells me that her parents have supported her all her life, paying for her to study in New York while her in-laws bought a flat in central London for her husband.
14)
Alina finds it strange that parental support is taboo in Britain, especially when it becomes an economic reality. "I feel that modern life is not set up for independence from your parents," she tells me. However, for her, it is also built on the expectation that all the help from her parents will be reciprocated in her old age. This creates a different dynamic: "You don't even feel an obligation because they are your parents; you want to take care of them". All these testimonies show that our inheritance stories are as much about the state of our family ties, cultural heritage and lived experience as they are about the housing market or inheritance tax thresholds.
15)
As economist Thomas Piketty argued in his 2013 book Capital in the Twenty-First Century, inheritance and the divisions it reveals have always existed. Still, if anything, we are returning to the dynamics and characteristics of the 19th century. Today's family stories of misfortune and opportunity echo the pages of Dickens, and the modern dating game resembles the pages of Austen. While interracial relationships have increased, class relationships seem to have declined. In a UK survey, 40% of upper-class respondents said they would not consider a long-term relationship with someone from a different social class. A recent report by the Resolution Foundation concluded: "People tend to mate with those who have similar inheritance expectations to their own." The latest TikTok trend may be to 'marry a financier', but a more accurate piece of advice might be to marry someone whose father was a financier.
16)
I interviewed independent women whose financial independence was often funded by mum and dad and who were reluctant to partner with someone without similar security. Others recognised that while struggling with economic insecurity in their relationship, they believed it would soon be different because of the inheritance.
17)
Emma, 31, a mother of three who is struggling to get on the housing ladder, is convinced this won't be a problem in 10 years when she and her husband's parental inheritance comes through. "My husband always says the sad reality is that both sets of our parents are in their 70s - in 10 years, we'll have more money than we know what to do with. It's morbid, but it's true.
18)
We know that the Bank of Mum and Dad is one of the UK's top 10 mortgage lenders, but that is only part of parent's influence on the housing market, from rent guarantors to rent payers, as landlords and mortgage payers. And, of course, their wealth as homeowners is estimated at over £5tn. Among baby boomers, 51% own a house with two spare bedrooms, often housing offspring who cannot get on the housing ladder. This means that the inheritance economy shows no signs of slowing down, and the next 30 years will see the most significant transfer of wealth in history. Of millennials, 80% expect to receive some inheritance, but it will be unequal. Millennial inheritances will average 16% of lifetime earnings, compared to 9% for Gen X. However, inheritances will boost incomes by 29% for the top fifth, compared to just 5% for the bottom fifth.
19)
None of these inheritances is guaranteed, not only because the Labour government has rightly sought to close inheritance tax loopholes (currently around 6% of estates pay the tax) but also because of a more significant factor: the cost of social care. In an ageing society, where older people have complex care needs, and the state cannot fulfil its 'cradle to grave' promise to the baby boomers, any inheritance, primarily housing wealth, is likely to be swallowed up by social care costs. In this context, those who have received an early inheritance in the form of a gift are doubly advantaged.
20)
I set out to explore the sources and dynamics of our meritocracy, and what I discovered was that parental wealth was the story behind the story, the economic thread that explains widening wealth inequality, growing disillusionment with higher education, stunted pathways to adulthood, changing gender dynamics, the complexities of milestone culture, a dysfunctional housing market and the complications of an ageing society.
21)
My own childhood and messy class identity were my starting point. Still, the more people I spoke to, the more I realised not only how unfair this lottery of birth is but how badly we all are at talking about it within our friendship groups, families, society, and even ourselves. And if we are going to address the fundamental issues raised by our meritocracy, this is undoubtedly where we have to start.
Bank of Mum and Dad: why we all now live in an ‘inheritocracy’
Family wealth dictates our life choices. So is the Bank of Mum and Dad now behind so many of society’s growing inequalities?
Add info)
Why did the term "Oyagacha" become popular? Characteristics of toxic parents and examples of when they feel like they've failed
"Parent gacha" is a game that uses the concept of "child gacha" as an analogy. For people, birth or parents are random, and they cannot choose them themselves.
Gacha, created from a random lottery, can be a hit or a miss. With capsule toys, whether you win or lose, there is an exciting feeling until the decision is made, but with "Parent Gacha," children who think they have "lost" often feel severe emotions.
Poverty is the most obvious example of a parent losing out on the gacha.
It is said that how much you can spend on education dramatically impacts your child's success rate after they grow up.
Children who receive a good education are more likely to succeed and build a wealthy family. On the other hand, children born into poor families are said to have a lower chance of success in work. When they get married and have children, this creates a cycle in which it becomes extremely difficult to build a family that can afford to spend money on their children's education.
