Inheritocracy
It's Time to Talk About the Bank of Mum and Dad
By Eliza Filby
Category: Money & Investments | Reading Duration: 17 min | Rating: 3.8/5 (17 ratings)
About the Book
Inheritocracy (2025) argues that meritocracy is a myth in today’s Britain. Inherited wealth, it suggests, trumps individual talent and effort in shaping the life chances of younger generations – above all, millennials. This isn’t a purely economic story, though: the increasing prominence of parents in adult children’s lives is redefining ideas about everything from growing up to love.
Who Should Read This?
- Millennials wondering why adulthood feels financially out of reach
- Parents thinking about wealth, legacy, and fairness
- Anyone interested in inequality, housing, and generational shifts
What’s in it for me? Learn why inheritance, not hard work, will shape life chances in tomorrow’s world.
Do you know someone like this? They’re in their mid- to late-20s. Their job is interesting and they’re good at it, but it doesn’t pay much. They rent, until suddenly, they don’t: they’re on the housing ladder. You wonder how they did it. The answer: the Bank of Mom and Dad, the financial powerhouse remaking Western societies. Younger people increasingly rely on their parents to achieve the milestones long associated with adulthood. Putting down deposits on homes, helping with childcare, or topping up wages are just some of the vital financial services provided by the Bank of Mom and Dad.Over the coming decades, millennials will inherit trillions of dollars of baby boomer wealth. This intergenerational wealth transfer – one of the largest in British history – won’t be equal. Those born into wealth will build on it; those who aren’t will struggle. Grit and talent matter, but not as much as inheritance. This, then, is the age of inheritocracy. The story we’ll be telling isn’t just about money, though: it’s about the kind of society we’re building and the one we really want to live in. As we’ll see, the gap between the two is widening.
Chapter 1: Inequalities within generations trump those between them
Generational conflict is the perfect hot-button topic. It’s emotive. It taps into age-old antagonisms. And it sells. The more toxic the debate, the more we click and subscribe.You know the clichés. Selfish boomers had it all: unprecedented growth, cheap homes, and a free education. Once they got theirs, they pulled up the ladder. Entitled millennials expect it all – the six-figure salary, the work-life balance, the sense of purpose. When it isn’t handed to them on a silver platter, they do what they do best: whine. From “Ok boomer” TikTok reels to tabloid articles about avocado toast, these caricatures sustain the endless churn of content. Stale stereotypes aside, the problem with all this discursive rumbling is how it places generations in the role of contending classes. But boomers and millennials aren’t like bosses and workers in a zero-sum Marxist class war. Their interests aren’t entirely distinct or opposed; they intertwine and overlap. They are, after all, family. Which brings us to inheritance. As baby boomers – the generation born between 1946 and 1964 – reach the end of their lives, we’ll witness one of the largest wealth transfers in history. In Britain, which is our focus here, it’s estimated that $7.4 trillion will change hands over the next 20 years. In the United States, this figure is somewhere between $15 and $84 trillion. Boomers will pass this wealth on in two waves. First, during their lives as lump sums gifted or loaned to children to help them achieve important milestones. The “Bank of Mom and Dad” – the name given to parents who can offer this kind of financial support – is already a top ten mortgage provider in Britain. The second wave will come after their deaths. That’s how the bulk of British baby boomers’ wealth will make its way into the hands of millennials born between 1981 and 1996. The scale of this wealth transfer makes inheritance one of the most important issues of our time. The economic divide opening up before us isn’t between the generations – it’s intragenerational. Age won’t separate the haves from the have-nots (or have-littles); unequal access to parental wealth will. What their parents own will do more to shape the life chances of under 45s than it has at any point since the Second World War. That, in a nutshell, is the argument we’ll be exploring in this Blink. As we’ll see, this unevenly distributed windfall is set to turn British society on its head.
Chapter 2: Britain is now an inheritocracy
In a famous thought experiment, political philosopher John Rawls asks us to imagine designing a just society from scratch. He helps us resist the urge to add unfair advantages by placing us behind a “veil of ignorance.” What that means is that we don’t know where we’ll end up: we could as easily be in the bottom 1 percent as the top five – or anywhere in between. Now, we want features that give everyone a fair chance. Suddenly, merit is at the center of our designs. Inherited privileges, meanwhile, are made to matter as little as possible. Rawls wasn’t making an abstract point. Writing in the 1960s, he was defending the kind of society he believed best matched up to his philosophical description of justice: Western welfare states. These societies, he thought, had redistributed resources as equitably as possible in the real world. As a result, most people had a fair chance, and opportunity reliably flowed to those who merited it through talent and effort. Postwar Britain was one of these “meritocracies.” The arts make for a good index of expanding opportunity. Historically, these pursuits required independent wealth: as Virginia Woolf put it, one needs money and a room of one’s own to be an artist. By providing subsidized housing, grants, and free education, the welfare state gave working-class artists – think of people like Alan Bennet, Ken Loach, and Morrissey – access to these goods. Punk is another example: many of the working-class bands that revolutionized music in the 1970s had met at publicly funded universities, bought instruments with “dole” money, and rehearsed in council houses.This infrastructure is gone. Government housing was sold off in the 1980s and never replaced; the introduction of tuition fees in the late 1990s effectively ended the era of free higher education. The welfare state’s retreat was amplified by two overlapping trends: stagnant wages and rising house prices. In 1980, a starter home cost roughly three to four times the average income; today, the ratio is nine outside London and 13 inside the capital. Rents exploded: the average millennial renter will have paid $60,000 more by the time they’re 30 than their boomer counterparts. A three-year degree, meanwhile, costs close to $100,000. The children of wealthy families are now five times more likely to occupy top positions in the arts than their working-class peers. It’s a similar story in other industries: getting a foothold in competitive fields is easier when your family can top up wages or cover the cost of unpaid internships. Unlike welfare, this support is contingent on what Rawls calls a “morally arbitrary” factor: the birth lottery. And that’s the big picture here: a society in which parental wealth, not grit and talent, determines life chances isn’t fair or merit-based – it’s an inheritocracy.
Chapter 3: Parents are becoming gatekeepers to their children’s adulthood
There are several ways to describe an inheritocracy. The numbers tell part of the story. Take this one, for example: British parents handed over $11 billion to their children during the pandemic. That’s around 10 percent of the government’s COVID-19 job retention scheme – one of the most expensive peacetime economic interventions in British history. That wasn’t a one-off, though. As already mentioned, the Bank of Mom and Dad is a top-ten mortgage lender in Britain. In 2023, that amounted to $13 billion in gifts and loans.Numbers only get us so far. But here’s an interesting statistic: 51 percent of baby boomers own a house with two spare bedrooms. That their children feel forced to stay in those rooms well into their 30s paints a picture of a society in which novel economic forces are overturning conventional ideas about growing up. The meaning of adulthood changes when your parents’ wealth determines your ability to achieve the milestones associated with it. In the words of one economist, parents are becoming “the gatekeepers to their children’s adulthood.” The advantages of parental support are obvious: those with access to the Bank of Mom and Dad are more likely to own their home, enjoy career flexibility, have less debt, and be financially secure. But such support often comes with a price: the erosion of personal autonomy – something we’ve long associated with adulthood. Take Sarah, a 34-year-old marketing executive. Sarah received $135,000 from her parents to buy a home, sparing her years of precarity in London’s rental market. But there was a catch: one of the rooms was reserved for future parental visits. This is a common scenario for millennials. In the hands of some parents, inheritances are a means of controlling adult children. Inherited wealth also appears to be changing the way younger generations think about love. While cross-cultural partnerships are becoming more common, long-term relationships across class lines are declining. A report from the Resolution Foundation, a think tank that researches social policy, concludes that people increasingly “couple up with those who have similar inheritance expectations.” In one survey, 40 percent of upper-class participants said they wouldn’t consider entering a long-term relationship with someone from a different social class. Ideas about marrying for love, it seems, are increasingly shadowed by quieter calculations about inherited wealth. That, too, is part of what it means to live in an inheritocracy.
Chapter 4: Inequality compounds over time
The UK isn’t alone: the Bank of Mom and Dad operates internationally. Survey data from the Royal Bank of Canada, for example, suggests that 50 percent of Canadian parents subsidise “children” aged between 25 and 35. A 2019 study by Merrill Lynch found that 70 percent of millennials in the United States had received financial support from their parents that year. Making your way independently through life is a lot harder than it used to be across the West. Wages have stagnated: in real terms, workers are earning less than they did in 2008 even as productivity continues to rise. Housing takes ever larger bites out of pay-checks. As the welfare state retreated, families stepped up to cushion kids from these economic blows. As one commentator noted, ours is an age of “good parents and poor citizens.” Such support, however, isn’t universal: not everyone can afford to be this kind of good parent. Close to a third of millennials in the UK won’t inherit anything, leaving them at a significant disadvantage. But there are important differences among those who do inherit. Around 30 percent of millennials receive a “living inheritance.” For them, the Bank of Mom and Dad isn’t an emergency ATM – it’s a lifelong investment account. The members of this minority begin accessing inheritances in their 20s. As a result, they get on the housing ladder and create financial security much earlier than those who inherit later – or don’t inherit at all.Early inheritances aren’t so much launch pads as virtuous cycles. Their recipients’ head-start allows them to steadily climb the housing ladder. Their wealth grows as they upgrade. Unlike poorer peers, starting a family isn’t a financial strain. This support is often what separates those who enjoy a seamless transition into adulthood from those stuck at the starting line. All these inequalities map onto regional imbalances. In the UK, parents from the affluent southeast and southwest are twice as likely to provide a living inheritance as parents in Scotland, the northwest, and the northeast. The status of parents is a reliable predictor of what their children receive. If your parents rent, you’re unlikely to get more than $6,700 when you buy your first home. By contrast, if they’re university graduates who own a house, you’re likely to receive around $35,000. Like wealth, inequalities compound over time.
Chapter 5: Rising care bills might force us to address questions of generational fairness
There’s an elephant in the room: people lead longer lives and require increasingly complex medical care as they age. That care is expensive – and politically explosive. How expensive? The average cost of a residential care home is around $1,000 a week; a week in a nursing home is closer to $1,500. Let’s take the latter figure. That makes around $78,000 a year – more than Eton, Britain’s most exclusive private school. The average stay in a nursing home is 2.2 years, but financial advisors urge families to plan for five. All in all, you’re looking at close to $800,000 for a couple. If you want a buffer – and advisers will tell you that you do want a buffer – you should be putting aside a sum closer to $1 million. In short: care is very expensive. Care is means-tested: if your assets are worth more than $31,000, you don’t have access to government assistance. Half the 400,000 care and nursing home residents in the UK currently pay for their own care. Though many of them exceed the threshold for government assistance – a threshold that hasn’t changed since 2010 – their savings often aren’t enough. Once various financial assets have been drawn down, many families end up liquidating their homes – a wrenching loss for a generation raised on the ideal of a “property-owning democracy.” That gets us to the politically explosive part. The cost of care is ballooning and Britain – with its ageing society – will soon find itself in the midst of a funding crisis. Everyone agrees that more money is needed; what they can’t agree on is who’s going to pay. The last time a government tried to make the elderly pay more for end-of-life care, the press whipped up a frenzy about its so-called “dementia tax.” That government promptly lost its majority in parliament. But the alternative – saddling the young with care costs – is generationally unfair. Making matters more complex, many young people have two horses in this race. As would-be inheritors, they want to protect the size of inheritances; as taxpayers, they want to ringfence their pay-checks. The answer to the care question overlaps with what Paul Johnson, head of the Institute of Fiscal Studies, says is the key challenge for the UK over the next 25 years: making “inheritance matter less.” Johnson thinks the elderly should pay more for care, which would help achieve that aim. But while reforming inheritance tax is a start, it won’t address many of the compounding inequalities we’ve explored in this Blink. Real answers are downstream of our willingness to talk about the inheritance economy in which we now live. Perhaps it’s time to start that conversation.
Final summary
In this Blink to Inheritocracy by Eliza Filby, you’ve learned that the retreat of the welfare state, a booming house market, and stagnant wages are combining to remake British society. Opportunities no longer reliably go to those who merit them through effort and talent – they flow to those who can afford them. Parental wealth increasingly separates members of younger generations. Those with access to the Bank of Mom and Dad are seamlessly transitioning into adulthood; those without it are struggling on the starting line. Britain, in short, isn’t a meritocracy any more – it’s an inheritocracy. Okay, that’s it for this Blink. We hope you enjoyed it. If you can, please take the time to leave us a rating – we always appreciate your feedback. See you in the next Blink.
About the Author
Eliza Filby is a British historian and author who explores generational changes in her work. Her writing has appeared in The Times, The Guardian, the Financial Times and the New Statesman. She received the Europa Forum’s Millennial Leaders Award for her research on generations in 2022. Filby hosts the It’s All Relative podcast and is the author of the #MajorRelate newsletter.