Rising care costs are quietly reshaping family finances – and squeezing the so-called bank of mum and dad.
New research suggests that growing anxiety about paying for care in later life is causing parents to hold back from helping their adult children now, even when they want to.
Data commissioned by Octopus Money shows that two-thirds (67 per cent) of UK adults who plan to give money to family members say they would have liked to give more, but worry about covering their own future expenses.
More than 60 per cent of this group are specifically keeping funds aside for potential care costs.
For families juggling children who need help with housing, childcare or rising living costs, a painful trade-off is emerging: support children now, or preserve capital in case it is swallowed up by care fees later.
Care costs are fuelling the fear
The scale of the potential bill explains the anxiety. For people who self-fund, care home fees can cost up to £1,500 a week in the UK, depending on location and type of care. The UK average is closer to £1,300 a week, according to carehome.co.uk – around £80,000 a year.
Kristian Manton, a chartered financial adviser at Octopus Money, says Brits should plan to have around £400,000 set aside to pay for care, which would cover around five years.
“What’s becoming increasingly clear is that the cost of care is rising at an inflation-busting pace, and people need to keep a close eye on this trend if they want to plan effectively for later life,” he says.
“One of the biggest shocks I hear from clients is the realisation that an expected inheritance can be completely wiped out by care fees. It’s a reminder that proactive planning isn’t a luxury – it’s essential.”
Parents holding back – across generations
While the survey does not isolate parents specifically, the findings point to widespread hesitation about giving money to family members.
Half of UK adults say they would like to give their family money, or more money, during their lifetime but are holding back because they are worried about covering rising care costs later in life.
That concern cuts across age groups. Around 41 per cent of Gen X say they are holding back for this reason, rising to 44 per cent of Baby Boomers and more than half of the Silent Generation.
Even younger adults report similar anxieties, reflecting fears about supporting parents as well as themselves later in life. Gen X – often supporting both children and ageing parents – are also the least likely to say they will leave money or property to their family in their will.
Crucially, the research suggests this is less about refusing help altogether and more about delaying or limiting it, particularly when it comes to larger gifts such as house deposits.
‘I want to help my children now – without being a burden later’
Janie, 60, knows the dilemma well. Recently divorced, she wanted to help her children get on the property ladder, but worried about becoming financially vulnerable if she later needed nursing care.
“I want to use my money to help my children now, but make sure I’m not a financial burden later on if I end up needing nursing care,” she says.
“So, I’m learning to take a more proactive approach to planning for the future and managing my money. I used to have a very cautious approach to risk but since my divorce, I’ve learned that I’m not the only one. Many women share this attitude – more women choose to save their money in cash ISAs than to invest in more lucrative bonds, for example.”
Having taken financial advice, she says: “I’m now much more confident that I’ll be able to both support my children now, and have financial security as I get older.”
Planning, not paralysis
Zohaib Mir, a financial planner at EQ Investors, says hesitation is rarely about unwillingness.
“Most parents don’t hesitate to help their children because they’re unwilling. They hesitate because they’re unsure – particularly about how much of their own wealth they may one day need to fund care,” he says.
“The concern isn’t misplaced. Care funding in the UK remains complex and largely means-tested, with residential care costs often exceeding £50,000 a year. Despite years of debate, there is still no clear framework families can plan around with confidence.”
He adds that financial support is often most effective earlier in life.
“Help with housing or childcare in someone’s 30s can materially improve long-term financial outcomes,” he says. “The same wealth passed on much later, as an inheritance, often has far less practical impact.”
Mir says balancing support for children with long-term security does not have to be an all-or-nothing choice. “In practice, this means modelling realistic care scenarios, setting aside a defined reserve specifically for later-life needs, and only gifting from assets outside that safety buffer,” he says. “The inheritance squeeze isn’t really about generosity. It’s about uncertainty and the absence of a clear plan.”
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