Gifting from the 'Bank of Family' has reached record levels in 2024 with £9.2bn being paid out, up from £8.1bn in 2023.

Legal & General (L&G) has revealed that the average contribution increased from £25,600 in 2023 to £27,400 in 2024.

The firm stated that with family contributions becoming "increasingly essential" for property purchases, more relatives are now being called upon to support aspiring homebuyers.

L&G said the increasing reliance on the Bank of Family "underlines the challenges" faced by would-be buyers who don’t have access to family support, with the majority of recent or prospective recipients stated they would have to delay their home purchase without financial help.

One in five (21%) said they would have to delay their home purchase by more than five years, while one in 10 (9%) first-time buyers would not be able to buy at all.

Of the 335,000 property purchases that the Bank of Family supported, 204,000 were funded with assistance from parents, 42,000 were bought with funds from grandparents and 88,900 from other family members or friends.

Chief executive officer at L&G Retail, Bernie Hickman, said: "Families across the generations are facing tough decisions as they try to balance the aspirations of today, with the needs of tomorrow.

"We need to look at what could help all generations achieve better financial security, enabling them to build savings and assets today, and sustain their financial adequacy through their later years too. Almost a quarter of families are using property wealth to help younger generations onto the property ladder, but this option isn’t available for everyone."

The survey of 2,056 adults who have purchased a home in the past five years revealed that while the majority used cash savings to help their loved ones to buy a home (48%), two in five (40%) used ISA savings and investments, and 12% are tapping into pension savings.

Property wealth also remains another source of gifted funds within almost one in five families (19%), either through downsizing (12%), equity release (8%), remortgaging (4%) or a combination of these.

The survey revealed that half (49%) of family members providing financial support believe giving the money has left them feeling less secure about their own financial position, while a further 11% said giving money has negatively impacted their standard of living.

Hickman added: "When people are making difficult and complex choices like these, understanding all the options, and what the long-term impact of choices might be, is really vital."

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