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Financial independence? You'll have to wait until you're 38
Parents are supporting a generation of 'chadults' who are struggling to find a job and buy a house, and the strain is taking its toll.
by Michelle McGagh on Jul 02, 2012 at 11:21
Older parents are feeling the financial strain of bank-rolling their grown-up children, or ‘chadults’, and they don't expect them to become financially independent until they are 38 years old.
A total of 4.4 million grown-up children in the UK are receiving financial support from their parents, according to the Cost of a Chadult study from insurer LV=.
The bank of mum and dad
Once chadults turn 21 they cost their parents an average of £47,324 during their adult years. Parents are regularly paying basic living costs for their children, including bills and rent to the tune of £2,103 a year.
They are also spending an average of £9,476 on big-ticket items over the course of the chadult’s lifetime, such as paying for education, holidays, weddings and a deposit for a property.
It is not just those in their 20s who are relying on mum and dad for money; parents on average don’t expect their children to become financially independent until the age of 38, and 28% of parents don’t ever expect their children to be financially independent.
Of the 4.4 million chadults in the UK, 1.6 million still live at home, 58% of whom are in their 20s, 29% are in their 30s and 12% are in their 40s. Parents who are supporting a chadult at home are paying out significantly more, with the cost rising to £55,447 over the years to financial independence.
The age at which parents expect their children to reach financial independence, 38, is also the average age of a first-time buyer in the UK today, although the figure is expected to rise to 41 by 2025.
Locked out of property market
With these figures in mind, it is understandable that the reason most chadults live at home is because they cannot get on to the property ladder – the reason 33% of parents say their children are living at home.
However, this generosity is putting a strain on parents’ finances, with 42% of parents who support chadults saying they struggle financially as a result. Some 12% said they are unhappy about providing financial support as they feel they don’t have a choice.
Nearly half, 44%, of parents have had to raid their savings and 10% have spent all of their savings supporting children. A quarter of parents with chadults are going without luxuries, but more worryingly one in 10 have said they will have to delay their retirement.
Mark Jones, LV= head of protection, said: ‘Bringing up a child is expensive and for millions the cost doesn’t stop there. Young people are leaving university with large debts, youth unemployment is at a record high, and property is unaffordable for many.
‘So it is likely we will see a growing number of adults who continue to depend on their parents financially.’
More about this:
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by Michelle McGagh on Aug 20, 2014 at 12:21