Young people supported financially by parents are more dependent and less ambitious, finds study

Parents hoping to improve their family’s social mobility by giving their children money could be doing the opposite, experts have warned, after research found a conclusive link between financial support and increased dependence.

Confirming what many have long suspected, a new study from the Newcastle University and Youth Employment UK not only shows that those whose parents have extensive networks are better paid, but that the children also remain dependent on family and become less ambitious.

But the aim of the study wasn’t to chastise parents for wanting to support their kids.

“The research brings a new depth to understanding just how much the family matters and how we can support young people with little family resources and those with abundance to progress,” says Laura-Jane Rawlings, CEO of Youth Employment UK.

The researchers highlighted the risks involved when young people are financially reliant on their parents, including an increase in intergenerational social inequality and a tougher jobs environment for those who don’t have parental support.

However, the study also highlighted that the current generation are worse off than their parents were; with precarious employment, zero hours contracts, low wages and the transition from education to work taking longer and being harder – meaning many have no choice but to rely on their family’s help. Many still live with their parents or have had to move back home.

Property prices remaining stubbornly out of reach for many young adults, and a separate study from Aldermore shows first time buyers underestimate the deposit they will require by 31 per cent – or around £15,400.

Indeed, recent data from Royal London suggests that, nationwide, only one in three parents have not and aren’t planning to offer their children or grandchildren help getting onto the housing ladder.

Regionally, those in more expensive areas are under greater pressure to stump up funds, with only a quarter of London-based parents saying they won’t or can’t provide help rising to two fifths of those in the East Midlands.

Of those who said they had, or planned to provide assistance, over one-third said they expected the amount provided to be less than £10,000. A further 28% said they had, or expected to provide somewhere between £10,000 and £20,000 to family members.

More than one in ten said they had or expected to provide in excess of £50,000. Only 15 per cent expected the money to be repaid.

Even among grandparents, Saga research suggests a third are now financially supporting their grandchildren – typically saving around £50 every month to hand over a total of £9,360 to every grandchild.

The Bank of Gran and Grandad has donated a total of over £37bn in funds to their grandchildren.

“Some young people are facing bigger challenges than others in the labour market, and a lot of it has to do with the resources their family has,” says Dr Emily Rainsford, research associate in politics at Newcastle University. “It’s not surprising many turn to their parents for help. The jobs market is risky and family support can soften the ground.

“This research shows that families are important for fostering trust, attitudes to work and ambition and passing on the networks that lead to better paying jobs. It also shows how resources are concentrated and reproduced in families leading to an exaggeration of intergenerational inequalities.

"By knowing exactly what parents do to help their young people get on in life we make recommendations for how the rest of the community can step up and help those who do not have the family resources to support them.”

Other findings showed that parents’ networks help their children get better paying jobs and their attitudes to work rub off on their offspring. Young adults whose mothers and fathers made it clear that work and money are directly linked, had a stronger ambition to become economically independent.

“For two decades we have discussed social mobility and tried to reduce the inequalities experienced by young people,” adds Rawlings.

“We know that the policy reforms are not working and this report and recommendations call on the need for the communities around our young people to take bolder and braver action if we are ever to see a real change.

“If we really want Britain and its young people to achieve their potential we must as a community step up.”