Retirement news
Twenty-somethings cost parents billions
12 February, 2007
The UK is becoming a nation of ‘children for life’, with many parents subsidising their children far later into adulthood than a generation ago – even once their dependents have become parents themselves.
This raises the concern that, as a result, many may leave themselves out of pocket in later life.
According to the new survey from retirement specialist GE Life, two thirds of the over 50s questioned received no financial help from their parents when they were in their 20s.
But at least 64 per cent currently help their grown-up children because they ‘need their assistance’ or feel it is their ‘responsibility as a parent’. This is a real indication of how times have changed for today’s twenty-somethings who increasingly seem to be turning to the ‘Bank of Mum and Dad’.
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Where does it end?
Despite many pensioners struggling to make ends meet in retirement, the study reveals that many parents continue supporting their children way into adulthood.
If the findings of this research were considered in a wider context and were applied across the whole of the UK, you will see that in monetary terms the amounts would be quite substantial.
Half of parents have paid towards their child’s first car, spending an average of £1,854 and totalling more than £18 billion. A further 43 per cent of parents have paid an average of £2,877 towards their child’s wedding – a total of £24 billion.
Fending for themselves?
In addition to living with their parents longer, children over 18 years old are being helped-out by their parents on a daily basis, with three in ten over 50 year olds saying they pay towards some or all of their children’s living costs.
Financial support even extends beyond the grave. Half of the over 50 year olds say they have already set aside cash for their children, with a further 24 per cent saying they plan to do so, in the event of their death. At least 84 per cent also say they plan to leave their property to their children.
However, it doesn’t stop with children; 20 per cent of grandparents are also paying out regularly for their grandchildren.
Twenty-something and broke?
The main reason why today’s over 50’s still help their twenty-something children out is because they believe they are financially not capable of doing it themselves.
More than 60 per cent said their children needed their financial assistance, with at least 44 per cent saying they felt obliged to help out.
Kirsty Macpherson, GE Life spokesperson, said: “GE Life’s study revelas that many parents never stop paying-out for their children and could potentially be leaving themselves out of pocket in later life. Even after death, they are still planning financially for their children, with 73 per cent planning to leave money for them, and 84 per cent planning to leave their property for them.
“However, if they’re struggling to make ends meet, their property could, in fact be an important source of income for them when they most need it. The worry here is that parents are forking out for their children in the alter years of their working lives and are not putting enough money aside for their own retirement.”
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