When nearly half of young adults in the UK admit to relying on their parent financially, We had to ask ourselves WHY?
Whilst historically, young adults still financially relying on their parents may have been considered as freeloaders, in today’s generation financial help from parents is seen as crucial.
‘Financial help from your parents is an economic necessity for this generation. It’s unfair to compare a 30-year-old today to one 30 years ago.’ — Lindsey Pollak, author
There are a number of contributing factors as to why the number of adults aged 18-35 are financially reliant on parents.
An increase in the amount needed in deposits to purchase a home
Finding the deposit is often seen as one of the biggest obstacles to buying a home. In 1996 according to ONS, first time buyers deposits were around 10%, however are at around 20% in 2020, mainly due to the affordability of first-time buyers being able to repay the mortgage. This has led to not only an increase in young adults remaining at home but also the reliance of parents to help fund the deposit needed to buy their first home.
Men more likely than women to live with their parents
Men aged 20 to 35 were more likely to be living with their parents than women. One in three men aged 20-35 live with parents compared to one in five women. This figure maybe related to the fact it is women that are more likely to live in a single parent household once they have children. If a relationship breakdown occurs in early adulthood men are more likely to return back to a parent house,
Delays in committing to relationships
In recent years, women have expressed their freedom of choice as to when, or whether they want to have children. Currently, according to the Office of National Statistics the average age in England and Wales to have their first child in 29 years old. Historically, having children has been the driving force for young adults to leave home and it occurred much earlier.
Changes to welfare benefits
The recent changes to the welfare benefit system has left under 35s unable to afford independent accommodation, due to the lower housing allowance rates. This has had a significant impact to young adult males, in particular those non-resident father according to research.
Staying in education for longer
Increasing numbers of young adults are also choosing to stay in education has increase by 72% over the past 20 years. With student loans being determined based on parental earnings it is like this increase has impacted on the amount parents have had to contribute to young adults living costs while studying. Furthermore, an increasing number of university students choose to return back to their parental home after they have finished their students.
Inflation and Wages
Inflation is likely to effect the 18-35 age category as they are the age bracket that is more likely to purchase items effected by the rise in inflation. Furthermore, the 18-35 age bracket is more likely to be affected by lack of wage raises in line with inflation. This may increase their likely hood of relying on their parents to meet the cost of living.
What is clear is the number of parents supporting their children as adults has dramatically risen. The number of young adults choosing to remain living with their parents is at an all time high and on Parents Day they absolutely deserve recognition for their unwavering support.
To talk about ways you can create a head start for your children financially, when they reach adulthood please get in contact at firstname.lastname@example.org or on Instagram @femmefinance_uk.
HAPPY PARENTS DAY!
Stephanie Wilson- Femme Finance