What if... The Bank of Mum & Dad closed...

...for mortgage lending? Glyn Brown considers other ways to invest in a child's future that might prove more rewarding

Illustration of roads that end with expensive financial decisions.

Illustration: Raymond Biesinger

Katie and Gareth Salt [not their real names] are young professionals in the city of London. The three- bed cottage they've just bought, both sets of parents chipping in on the deposit, cost £650,000 and is unmodernised. Renovation plans (the bathroom's so small, 6ft 4in tall Gareth showers at work) will cost around £120,000. They leave for work at seven in the morning and get home between 10pm and 3am. Weekends, even sunny ones, are spent flaked out on the sofa and their pretty garden, which they hardly see, is dying. But with a mortgage like Everest, they don’t have time to consider any other ways to live.

We're desperate to help our children into the yoke of home ownership. We do it as an investment for them, as collateral when they move to something bigger, with an even bigger mortgage – before, exhausted, eventually downsizing.

But how's this for a wild, inspired notion. Instead of advocating buying, we could help offspring spread their wings and find out what they genuinely want while they've got time to change their plan. In the course of it, they may learn skills that mean they can buy their own place, without needing help, a little further down the line.

Bricks and mortar are only one foundation for a future – others may ultimately pay bigger dividends

It's radical but, as any baby boomer knows, you only get one life, and it's wise to squeeze the most from it. Bricks and mortar are only one foundation for a future, and others may ultimately pay bigger dividends. Here are a few alternative ways to invest in your child’s life that may be as, or more, fruitful:

  • Enable retraining to a more fulfilling career. There's a growing need for skilled social workers; teachers; even pilots, since the proliferation of low-cost airlines means this is one of industry's biggest areas of labour shortage.
  • Entrepreneurs are highly prized, but as shows like Dragon’s Den make clear, start-up capital is crucial. Seed capital for a business plan, if it's a strong one (give them a year?) could result in the next Mandy Haberman (Anywayup Cup) or Shaun Pulfrey (the heroic Tangle Teezer brush, ridiculed by the Dragons. The company is worth £200m and ex-hair colourist Pulfrey has won the Queen’s Award for Enterprise). If your child has a concept, ask about it...
  • A year working (or interning) abroad broadens the mind, and can help with learning a skill and/or a new language, as well as providing useful contacts. In her mid-thirties, journalist Belinda Kerr chucked her job and her rented flat in Bath, Somerset, to spend five weeks working in a Californian vineyard. A loan from her parents buffered the move. Eighteen months later, she’s still there.
  • Working for Voluntary Service Overseas changes your world and someone else's for the better. There's a huge demand for professionals with at least three years' experience to help improve lives in developing countries – from health advisors in Myanmar to teachers in Nepal. There's a local living allowance, but a year's parental investment makes this truly possible.

Enabling comes in many shapes. Giving someone the freedom to think out of the concrete box is one of them.

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