‘It’s time to give a Citizen’s Advance to those who can’t rely on Bank of Mum and Dad’

We live in a country where access to the Bank of Mum and Dad has a greater impact in shaping your life than it has for decades.

For millions of people, your hope of getting on the housing ladder, changing career, or even starting a family is increasingly dependent on how much financial support you can rely upon from your parents.

This isn’t an original diagnosis, the case has been made by Thomas Piketty, with a UK focus in books like Inheritocracy by Eliza Filby and in countless pieces of financial analysis. In 2023, Legal & General found that the Bank of Mum and Dad was on course to hand out £8.1billion pounds to its beneficiaries, up 50% in just three years.

As a new Labour MP, I want to start a conversation about how we extend the opportunity for those who can’t rely on the wealth of their parents to get ahead. Breaking down barriers to opportunity is rightly one of the central missions of this government. It’s welcome we have a renewed focus on early years and education, but I want the debate to reflect the experiences and challenges of young adults too.

Parents will always want to offer financial support to their children and it is human nature that they do. My proposal isn’t about how we tax family gifts or inheritance differently, it’s an idea for how we offer financial support to all young adults, through a Citizens Advance.

‘A house deposit seems like a distant dream’

If you are under the age of 40 and have made at least 10 years of National Insurance contributions, I want the state to give you a chance to access a lump sum worth £11,500. This isn’t free money, your choice would be to delay your state retirement age for a year and in exchange, receive the value of one year’s state pension upfront (£11,500) as a lump sum.

Imagine you are a 28 year old (born in 1996) who started work as an apprentice mechanic aged 18. You have worked solidly and paid National Insurance for 10 years, rent in a shared house and put £150 away a month.

You are doing everything asked of you, but despite saving as much as you can, a house deposit seems like a distant dream. Currently your state retirement age is 68. Choose to move that back one year to 69 and you receive a lump sum of £11,500 instead. A Citizens Advance that finally means a house deposit is in reach.

READ MORE: ‘Why I’m calling for universal free school meals for all children across England’

Or consider a 31 year old graduate, who started work at 21. You have just hit 10 years working in marketing, have a mortgage and a two year old. You are desperate for a career change and have found a full time masters course you want to take to allow you to retrain, but you simply can’t afford it.

You face being locked into a career just to pay the bills, when you know you’ll be happier and more productive in a new role. Your state retirement at 68 feels a very long way off, so you choose to defer until you are 69, take the £11,500 Citizens Advance and you start the course.

‘This would not be the state offering something for nothing’

Given you are borrowing from your future self, a Citizens Advance would be net neutral for the Treasury over the long-term. It would bring forward state spending and act as an economic stimulus, so the mechanism needs discussion and refinement.

I am pleased the Social Market Foundation has agreed to work with me on the idea, and there is an open invitation to people who like the concept and want to help us develop it further.

My vision for a Citizens Advance is anchored by a set of principles that I think can earn widespread support.

READ MORE: ‘Labour must deliver change voters can feel’, says Fabian Society’s Joe Dromey

First, this would not be the state offering, ‘something for nothing’. Setting eligibility at 10 years of National Insurance contributions means it would only be available to those who have made a contribution to society. Secondly, that there would be no compulsion to change your retirement age.

People would be trusted to make an informed choice about the value of retiring a year later, or accessing the £11,500 today.

Thirdly, this would be a universal offer to all citizens who meet the criteria.

The Bank of Mum and Dad can be life changing for those who can draw down from it. My vision is that accessing a Citizens Advance will one day be just as transformative and crucially, it will be an offer that is open to all.

For more from LabourList, subscribe to our daily newsletter roundup of all things Labour – and follow us on  Bluesky, WhatsApp, Threads, X or Facebook .

• SHARE: If you have anything to share that we should be looking into or publishing about this story – or any other topic involving Labour– contact us (strictly anonymously if you wish) at [email protected].
• SUBSCRIBE: Sign up to LabourList’s morning email here for the best briefing on everything Labour, every weekday morning.
• DONATE: If you value our work, please chip in a few pounds a week and become one of our supporters, helping sustain and expand our coverage.
• PARTNER: If you or your organisation might be interested in partnering with us on sponsored events or projects, email [email protected].
• ADVERTISE: If your organisation would like to advertise or run sponsored pieces on LabourList‘s daily newsletter or website, contact our exclusive ad partners Total Politics at [email protected].