Parental financial assistance rises by fifth in two years
While most offspring expect this support to come in the form of a deposit to help get on the housing ladder, increasingly it is everyday expenses being supported, with rent payment assistance almost doubling in the past two years.
The latest findings indicate over £30bn has been handed over to young adults aged 18+ in the past year by their parents, an increase of £1bn on the previous year and over £5bn since 2013. This represents a 21 per cent increase in just two years.
Meanwhile, grandparents are adding additional support to their adult grandchildren, to the tune of around £6bn. In total, young adults have received almost £37bn in handouts from family members this year.
While the past year has perhaps been more settled, overall support ticked up, just outpacing inflation, to pass the £30bn mark. On a per capita basis, UK 18-64s now receive an average of £763 a year from parents, and £916 a year from parents and grandparents together.
The research also indicates that parent’s attitudinal commitment to supporting children financially remains strong. Over two thirds of UK adults (68 per cent) say they would feel they were letting down their family if they did not save for the future. A similar amount (67 per cent) feel children cannot hope to achieve success in life without financial support from their parents, and 74 per cent believe parental financial support will become more important in future.
Generation ‘thanks for paying my rent’
While items like a wedding and a house are high on the list for reasons for lending money, the increase in demands on parents’ purses is driven primarily by big increases in levels of parental help with rent payments (up from £2.4bn to £4.1bn in the past two years), and help buying cars and vehicles (now £4.08bn). Other items on the rise in the past year are help with day-to-day shopping (7 per cent up on last year), and with buying appliances (10 per cent up on last year).
This year’s sharply rising demand for help with rent, and the fact house purchase and rent support are now the two largest components of parental financial support, clearly shows the economic conditions faced by young adults today.
While there seems to have been some easing up of demand for help with credit card debt and utility bills, and significant reductions in more discretionary forms of support (gifts and holidays), these happier economic factors (and ‘stricter’ approach to providing support) have been outweighed by increases in the funding of ‘big ticket’ costs of housing, motoring and weddings.
“There is an increasingly clear majority of UK families which endorse a strong financial role for parents, expressing a sense of financial duty to future generations,” said Philip Robinson, savings director for Lloyds Bank.
“However, parents must sometimes feel they are on a merry-go-round with their children’s financial needs. As we move away from demands for cash, debt relief and energy bills help, we see increases in demands for more fundamental help with housing costs and big-ticket purchases.”