The bank of mum and dad has become a regular part of family life across Australia. Many parents now help adult children buy their first home, manage rising living costs, or get established in business. While this support is usually given with good intentions, the way it works in 2026 is far more complex than it once was.
In this blog, we explain how the bank of mum and dad is changing, common ways families provide support, the risks people often overlook, and why clear financial planning matters. We also explore how the right advice can help families protect everyone involved.
What is the bank of mum and dad?
The bank of mum and dad refers to financial support parents or grandparents provide to their children or grandchildren. This may include cash gifts, loans, loan guarantees, or help with ongoing expenses.
In 2026, this type of support is no longer uncommon. For many families, it feels like one of the only ways younger generations can move forward financially, particularly when entering the housing market.
Why the bank of mum and dad is so common now
Property prices and everyday living costs have continued to rise faster than wages. As a result, many adult children struggle to save a home deposit or keep up with rent while also managing day-to-day expenses.
Parents often step in to help with:
- Home deposits
- Loan guarantees
- Temporary cash support during life changes
For example, parents may help their child bridge the gap between savings and a required deposit so they can secure a home sooner. While helpful, informal arrangements like this can cause problems later if expectations are not clearly discussed and documented. This is where planning becomes essential.
Is the bank of mum and dad a gift or a loan?
One of the most common questions families ask is whether financial support should be a gift or a loan. This decision has long-term implications.
- A gift is generally not recoverable and may affect future estate planning.
- A loan can be repaid but should be formally documented to avoid confusion or disputes.
For example, parents may intend a payment to be repaid eventually, but without written terms, adult children may view it as a gift. This can create complications during separations, family disagreements, or when estates are settled.
Many families seek financial advice in Geelong before transferring funds to ensure everyone understands the arrangement and feels protected.
Risks families often overlook
The biggest risk of the bank of mum and dad is not just cash flow. Financial support can affect retirement plans, family relationships, and eligibility for government benefits.
Parents sometimes give more than they can comfortably afford long-term, especially when trying to help during emotionally charged moments. Others may not realise how providing support could impact their future income needs or aged care planning.
Family tension can also arise if one child receives assistance and others do not. A financial planner in Geelong, such as one at LBW Business + Wealth Advisors, can help families step back and look at the full picture, not just the immediate need.
How can financial advice help families move forward with confidence?
Good planning allows the bank of mum and dad to work as intended. It helps support feel empowering rather than stressful.
Geelong financial advice can help families:
- Decide how much support is financially safe
- Structure loans or gifts appropriately
- Document agreements clearly
- Align family support with long-term goals
In some cases, financial planners work alongside accountants or legal advisers to ensure the arrangement is sound from every angle. This approach helps reduce misunderstandings and protects both generations.
Planning the bank of mum and dad with LBW
The bank of mum and dad works best when guided by clarity and care. With the right planning, families can support loved ones while still protecting their own future.
LBW’s team of financial planners in Geelong works with families seeking balance, fairness, and long-term security. If you are considering helping your children or grandchildren, a conversation with a financial planner can help you move forward with confidence and peace of mind. Book an appointment today with one of our financial planners in Geelong, or give us a call on 03 5221 6111.
This blog provides general educational information only. The content does not take into account your personal objectives, financial situation or needs. You should consider taking financial advice tailored to your personal circumstances.
LBW Business + Wealth Advisors is an Authorised Representative of LBW Wealth Pty Ltd ABN 56 652 382 128 AFSL 534569. Please see our website www.lbwca.com.au or call 03 5221 6111 for more information on our available services.
