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Cutting the apron strings
by Sarah Modlock
There was a time when young people could not wait to leave home and do their own thing. Now it seems that many of them have never had it so good as the lure of the family home is stronger than ever.
An exasperated one in four parents say they have adult children who are still living at home, BBC research has shown. According to a study by the Money Programme, debts and high property prices often force offspring to live at home into their twenties and even their thirties.
But it is not without a strain on the Bank of Mum and Dad. The study suggests one in seven parents with adult children have remortgaged or taken out a loan in an attempt to help. The ongoing drain on finances created by grown-up children remaining at home is a financial burden that exacerbates the difficulties posed by longer life expectancies. Despite this, only a quarter of parents whose adult children are still at home said they were keen for them to move out.
Of course, this new wave of dependency has sparked a new acronym: KIPPERS are 'kids in parents' pockets, eroding retirement saving'.
Getting rid of your over-sized offspring may not come cheap, either. A report from the Skipton Building Society reveals that up to two million parents have adult children over the age of 30 living at home. Shockingly, one million of them are 36 years or over. And some parents are giving their grown-up children golden handshakes to leave home and buy their own properties. With an average payout of £8,000 to help them flee the nest - £5,000 to help them on to the property ladder and a further £3,000 for their upkeep - it's a no-lose situation for junior. That is a lot of pocket money. Research from TNS shows that parents also spend cash setting up investments or savings accounts, buying cars, funding a gap year and even starting a pension for grown-up children.
Nearly half of the parents questioned were prepared to give up their annual holiday to provide the cash and one in five said they were even willing to go into the red to help their children or were considering taking out a personal loan.
Baby love
Here is the problem: nine out of 10 have their meals cooked and their clothes washed by their parents and only a third of parents ask their children - working or not - for any financial contribution towards household bills.
'There are a number of reasons why so many grown-up children are still living at home, including the fact that the parents may want them to stay,' says Jennifer Holloway of the Skipton. 'But a big issue is that rising house prices mean that many young children can't afford to leave the family home."
UK charity Parentline reports that around a fifth of calls it receives are from fed-up parents complaining about their adult children living at home. Borrowing money, bringing friends and partners home and not getting up for work are most common problems.
'Where parents would have worked hard all their lives, they are now looking at children with a lot more money than they had and a different approach to work and spending,' says Parentline's Rita O'Reilly.
The answer - according to the Children's Mutual - is to start saving now to avoid unwanted lodgers. It warns new parents that unless they take action now, they could see themselves remortgaging or with adult children under their feet for many years to come.
The firm has calculated that if parents had saved £50 a month over the last 18 years they would now be collecting a lump sum of £26,000 which would help them provide a financial foundation for their child.
'Saving small amounts regularly over the long term can help parents avoid big debts in the future.' says Children's Mutual Chief Executive David White. 'When children are in their twenties or thirties their parents should be thinking about their retirement salary pot, not taking out further loans or funding their child living in the family home.' |
