The Bank of Mum and Dad: Average Support Age RisesMarch 5, 2015
Thanks to the current economy in the UK, children who grow up and fly the nest are still unable to pay bills and rent without a little help from mum and dad. This is due to a difficult job market making it harder for graduates to find high-paid jobs, coupled with the fact that graduates have huge amounts of debt to pay off. Although the country is finally moving out of a recession, research has shown that the average age of children still receiving financial help from their parents is 26.
The research, done by Fidelity, has found that just over half of parents asked said they support at least one child who has flown the nest. One in ten parents said that they support two children who have technically left home. The study also found that 22% of parents have given their children up to £5,000 after they have left home and 12% said they have spent up to £20,000 supporting their grown children.
One of the main reasons parents are now having to support their children after they have left home and found full-time employment is the rising cost of property. Many parents want their children to get on the property ladder like they did when they were the same age, but nowadays it’s not so easy to secure a mortgage or save for a deposit. Half of all parents surveyed said that they have given their children help with a house deposit, giving them on average £1,038 towards the cost. The question is: how is all this financial support affecting the parents’ lifestyles? Once upon a time children left home at an early age and supported themselves, leaving parents with more income to spend on themselves…
According to the research, most parents today have had to change their lifestyle habits in order to have enough money to support their children. The figures differ depending on the region – in Yorkshire and the Humber 14% of parents admitted to changing their lifestyle, while in London the figure was over 13%. A change in lifestyle could simply mean swapping to a cheaper supermarket, or something more drastic, like cancelling trips abroad. Fidelity’s self-invested personal pensions are a good way of safeguarding against this having an effect on your retirement, with 13% of all parents reporting the worst-case scenario in them having to delay their own. Whether the effects are big or small, most parents are now choosing to sacrifice something to give their grown children some much needed financial help and so planning ahead is crucial to minimise these effects.