BMO Survey: Parents are stepping in as a financial safety net for Gen Z and Millennials

A special report from the BMO Real Financial Progress Index explores the growing financial interdependence among generations, revealing parents and grandparents are increasingly expected to support adult children.   

The BMO survey found that while nearly three quarters (73%) of Canadian parents and grandparents plan on leaving an inheritance to their children and/or grandchildren, nearly half (45%) plan on providing financial support to their adult children and/or grandchildren in the next year. Many young Canadians increasingly rely on intergenerational financial support to help with daily expenses and costs including childcare, housing and more. 

Expecting financial support from parents and/or grandparents in the next year	Gen Z	Millennials
General expenses	22%	14%
Student and/or education loans	16%	6%
Child-related costs (i.e. clothes, toys, food, childcare, tutoring, activities, etc.)	13%	11%
RESP contributions	10%	8%
Contributions towards a down payment for a home	8%	8%

Planning financial support for children and/or grandchildren in the next year	Parents and Grandparents
General expenses	23%
Child-related costs (i.e. clothes, toys, food, childcare, tutoring, activities, etc.)	16%
RESP contributions	9%
Student and/or education loans	9%
Contribution towards a down payment for a home and/or their child	6%

The majority (88%) of Canadians believe parents need to be concerned about their children’s economic future given the current economic outlook. Among those with increased concerns about inflation in the past three months, 88% are worried about their children’s education, financial future and career prospects.

“The Canadian labour market has weakened considerably in recent years, first driven by past interest rate hikes and a surging supply of labour, and now a highly uncertain trade backdrop weighing on the economy. Nowhere are these factors more apparent than in the youth job market – the unemployment rate for people aged 15-24 years has jumped to 14.5% as of August, more than twice the national rate of 7.1%. Wage growth for this group has also cooled significantly, at 1.2% year over year in August compared to 3.2% for all workers. In the three years to August, wages for youth have risen at a 3.6% annualized rate, lagging the national pace of 4.4%, and the 6.6% growth in rents, the 4.7% increase in homeownership costs and a 4.3% rise in grocery prices.”

– Shelly Kaushik
Senior Economist, BMO

With the growing reliance on intergenerational support, the survey examines the scale of asset transfers and how Canadians and their families are navigating shifting expectations around financial support and inheritances:

• The great wealth transfer:
  • Nearly three quarters (73%) of Canadians plan on leaving an inheritance to their children and/or grandchildren, 69% intend to pass on personal property such as jewelry, art, collectibles, etc., 65% plan on transferring real estate or property and over a quarter (27%) have a desire to pass down the family business.Nearly one in five (19%) will pass down debt to the next generation.
• Great expectations:
  • Over half of Gen Z (53%) and Millennials (51%) expect to receive a cash inheritance from their parents and/or grandparents through a trust or will, with one in five Gen Z (21%) and Millennials (19%) having already received some or all of their inheritance or expecting to receive it while their parents are still alive.Approximately half of Gen Z (53%) and Millennials (46%) anticipate inheriting personal property such as jewelry, art, collectables, etc., while over two in five expect to receive real estate and/or property (Gen Z: 46%; Millennials: 42%) and investments (Gen Z: 41%; Millennials: 40%).Nearly a third (32%) of Gen Z and a quarter (23%) of Millennials expect to inherit the family business.
• From nest to neverending nurture:
  • 82% believe parents must continue to support their children financially into adulthood.Nearly a third (29%) believe this support should last for as long as the parents are alive.

“As many young Canadians navigate the current economic environment, parents and grandparents understandably want to help alleviate some of the financial pressures – from rising housing costs to education and childcare. While support can make a meaningful difference, it is important to strike a balance between generosity and protecting your own long-term financial health. We encourage families to assess their goals, set clear boundaries around what they can sustainably provide, and work with a financial advisor to build a plan that empowers – not enables – loved ones, and helps you make real financial progress together.”

– Anthony (Tony) Tintinalli
Head, Specialized Sales, BMO

“Estate planning at its core is about facilitating the transfer of wealth across multiple generations and in our practice, many families have the desire to transfer some of their wealth while they are still alive and able to see the benefits this can have on their loved ones. Fostering open communication among the generations about wealth, legacy plans and shared family goals and values is an important step, as our experts provide guidance and develop plans to help optimize the growth and transfer of wealth, helping future generations continue to grow and prosper over time. Proactive estate planning allows families to make these decisions with confidence, ensuring gifts are structured effectively, tax implications are minimized, and legacy goals are preserved.”

– Lydia Potocnik
Vice-President and Regional Director, Estate and Trust Services, BMO Private Wealth

The sandwich generation

The survey also examines the growing pressures faced by the sandwich generation – those simultaneously caring for aging relatives and younger dependents.

• Caught in the middle:
  • Nearly two in five (37%) Canadians are responsible for the financial and emotional well-being of aging parents or in-laws, with 15% also raising children at home.
  • 30% are caring for other older family members and 25% are supporting relatives with special needs.
  • 28% are still responsible for the financial and emotional well-being of their adult children and 18% are helping raise their grandchildren.
• Financially pressed and emotionally stretched:
  • Over half (52%) of Canadians expect children to help support their parents in retirement, however 78% worry about their own ability to save for this milestone.
• Younger generations spread thin:
  • Gen Z (51%) and Millennials (48%) are more likely than any other generation to manage the financial and emotional care of aging parents – often while raising children and managing their own finances.

To learn more about how BMO can help clients make financial progress, visit BMO.com.