Although childhood may be thought to end at 18 or 21, parents are financially supporting their sons and daughters until they reach the age of 38 as their ‘chadults’ cost them an average of £47,324 over time, according to Liverpool Victoria (LV).
Parents ‘foot the bill’ of adulthood
Mortgage deposits, weddings, property and education have always been associated with parental support however such costs are now setting parents back an average of £9,476.
On top of this, many parents are funding everyday ‘basic living costs’ such as bills and rent, making contributions of around £175 per month or £2,103 per year towards these.
According to LV’s research, parents do not envisage this to stop anytime soon. The majority of parents feel that their children will not reach financial independence until the age of 38 while 28% expect that they will always have to provide their children with handouts.
Mark Jones, Head of Research at Liverpool Victoria:
“Young people are leaving university with large debts, youth unemployment is high and property is unaffordable for many. Many parents won't have considered how their kids would continue to cope if they could no longer support them financially.”
12% of over 40s still living with parents
1.6 million of the 4.4 million children financially reliant on their parents have not flown the nest with 58% of these in their twenties, 29% in their thirties and over one in ten aged over 40.
A third of parents said that their reason for having their children back at home was that they cannot afford to get on the property ladder and do not want to rent. Nearly one in five (18%) claimed it was because their child had not been successful in securing a ‘suitable job’ since finishing their education, 12% said it was the result of a failed relationship and one in ten had returned home as a result of debt problems.
The number of adults living at home could grow further as the average age of a first-time buyer is set to rise from 38 to 41 by 2025.
Parents feel the pinch
Reliance from children in later life is not without its consequences for parents. Nearly half (42%) of parents offering their sons and daughters assistance have admitted that it has a strain on their own financial situation. 12% state that they do it because ‘they feel they don’t have a choice’.
44% of parents have been forced to dip into their own savings to help their children out and a further 10% have spent all of their savings doing so. Mark Jones continued:
“Discussing their financial situation with a professional adviser and looking at all the options available, including life cover and income protection, making sure policies are put in trust for children where appropriate, and having an up-to-date will in place, can provide invaluable financial security for families.”