15th October 2014
Forget the cost of raising a child. A new study has revealed that those aged between 18 and 30 are costing the Bank of Mum & Dad an average of £32,664 – and many are still even getting pocket money.
The analysis from peer-to-peer lender Zopa found that shockingly almost half, at 44% of parents, admit they may have to retire later than originally planned to help cover the costs of their adult children.
The biggest expense is university or higher education fees, which parents contribute an average of £5,482 per child. This is closely followed by helping with house deposits, with a typical hand-out of £5,218 as well as funding wedding celebrations, which average out at £4,903 per child.
Perhaps most surprisingly, 71% of parents continue to provide their adult children with an allowance, topping up their incomes to an average sum of £3,115.
Daughters are £5,669 more costly to support through adulthood, with the average cost to parents between the ages of 18 and 30 being £35,920, compared to £30,251 for sons. The research showed that males were more likely to be asked to contribute to household costs than females, while adult daughters received 27% more in allowances than sons of the same age.
Some 53% of respondents said their adult children had lived at home with them for a year or more, with those aged 18-25, spending significantly more time at home suggesting that the ‘Boomerang Generation’ trend is continuing. As of result of these costs, over two thirds of those parents made their children pay rent or contribute to household costs, charging their offspring an average of only £129 per calendar month: well below UK market rental rates.
The rising cost of supporting adult children is causing financial headaches for those approaching their retirement years. Over half, at 55%, of the parents surveyed said they had not considered these additional expenses when working out how much raising a child would cost them.
As a result of these extra costs, nearly two thirds said they had dipped into their own savings to help support their grown-up child while more than 70 per cent said they have had to adjust their lifestyles to accommodate the extra expenditure.
Giles Andrews, CEO and co-founder of Zopa says: “It’s fairly clear the cost of raising children does not stop at 18 and with current economic circumstances, British parents can end up supporting their adult children financially for much longer than initially anticipated. The cost of raising an adult is having a significant impact on the financial futures of many British parents. Young parents concerned can soften the blow of continuing to support their future adult children through smart financial planning and being savvy with their money.”