Supporting the Next Generation, Without Compromising Your Own Future
For many Australian families, financial support is no longer something that happens only through inheritance. It’s happening now.
From helping children with a home deposit to funding education, clearing debt, or supporting a new business venture, the so-called “Bank of Mum and Dad” has become one of the country’s largest informal lenders.
But increasingly, it’s not just Mum and Dad. It’s grandparents too.
Welcome to the era of the Family Bank.
At Sherlock Wealth, we’re seeing more families ask the same important question:
How do we help our children and grandchildren, without putting our own financial security at risk?
Why the Family Bank Is Growing
Rising property prices, higher interest rates, and cost-of-living pressures have made it more difficult for younger generations to get ahead independently. As a result, many parents and grandparents feel compelled and are often willing to step in.
This support may take many forms:
- A lump sum gift
- A loan
- Acting as guarantor
- Drawing from superannuation (where permitted)
- Using investment capital
- Early inheritance planning
While the intention is generous, the financial implications can be significant.
The Risks Beneath the Surface
Helping family can feel straightforward, but the technical and emotional risks are often underestimated.
Some of the key considerations include:
- Tax consequences (including capital gains tax if investments are sold to fund assistance)
- Superannuation strategy impacts
- Centrelink or Age Pension implications
- Estate planning distortions between children
- Relationship breakdown risks
- Unclear documentation of loans vs gifts
Importantly, many families do not formalise arrangements. This can create confusion, resentment, or unintended inequality down the track.
As Andrew Sherlock, CEO of Sherlock Wealth, explains:
“Supporting family is one of the most generous things you can do. But generosity needs structure. Without planning, you can unintentionally compromise your own retirement security or create future tension within the family.”
From “Bank of Mum and Dad” to “Family Bank”
What we are increasingly seeing is a shift from one-off assistance to a more strategic, structured approach, which might be called the Family Bank model.
This approach involves:
- Clarifying your long-term retirement needs first
- Stress-testing your cash flow and investment strategy
- Structuring support in a tax-effective way
- Documenting arrangements clearly
- Ensuring estate plans reflect any early transfers
- Educating the next generation about financial responsibility
The key principle remains simple:
Your retirement must remain secure before you extend support.
Not All Support Needs to Be Financial
Sometimes the most valuable assistance isn’t money, it’s guidance.
Helping the next generation understand budgeting, investing, debt management and long-term planning can have a far greater impact than a lump sum transfer.
We often encourage families to bring adult children into conversations, not necessarily to disclose figures, but to introduce the thinking behind wealth decisions.
Because wealth transfer isn’t just about assets, it’s about confidence and capability.
Planning for All Eventualities
The Family Bank can be an effective way to assist loved ones, but it needs to be balanced against:
- Longevity risk
- Market volatility
- Aged care costs
- Legislative changes
- Unexpected health events
What feels affordable today may look different in 10 or 20 years.
This is why we encourage clients to treat family assistance as part of their broader wealth strategy, not separate from it.
A Measured Approach
Before making significant financial gifts or loans, it’s worth asking:
- Have we modelled how this affects our retirement?
- Have we considered tax implications?
- Is the arrangement documented clearly?
- Are all beneficiaries being treated fairly?
- Does our estate plan reflect these decisions?
A short planning conversation can prevent long-term complications.
Final Thoughts
The Great Wealth Transfer is no longer just about inheritance at death. It is happening now through early transfers, property support, and intergenerational financial collaboration.
Supporting family can be deeply rewarding. But it works best when generosity is matched with structure, clarity and advice.
If you’re considering assisting children or grandchildren or if you’d like to review previous arrangements, we’re here to help ensure your strategy remains balanced, secure and aligned with your long-term goals.
Thoughtful planning today allows generosity to remain a strength, not a strain, on your long-term financial security.
Source: ClearView Clear Insights, Let’s Get Technical, February 2026.
