Parents should expect to pay their kids’ bills for 30 years

Parents are taking out almost £2m in loans each year to fund their children’s spending habits, the latest research has found, with parents supporting their children until the age of 29.

Turning 18 may have once symbolised the beginning of adulthood, but the journey to financial independence is lengthier and more costly than parents may have ever bargained for.

A study by Sainsbury’s Bank reveals that while a quarter of UK parents hope they won’t have to fund their offspring much past their early 20s, fathers are likely to cut the purse strings on their children up to three years earlier than mothers.

Paying for everything from significant birthdays to gap year travel plans, half of those who took out a loan to support their children last year put the money towards a wedding, with the average value standing at more than £12,000. Other popular reasons were education, including university fees, costs and trip expenses, with an average value of £13,000; loans for children’s cars (£9,500) and household expenses (£8,000).

“Providing financial support to grown-up children is something that parents are now having to factor into their financial planning,” Simon Ranson, head of banking at Sainsbury’s Bank, said. “Many young adults struggle to achieve financial independence and rely on their parents’ support for much of their early adulthood. It’s vital for parents to instil the importance of financial savviness in their children from an early age and steer them towards financial independence while offering support where needed.”

For many families, flying the nest is a shared journey as parents take responsibility for the financial burdens of young adults until they can earn enough to achieve complete financial independence. Figures from the Office for National Statistics suggest that about one in four adults lived with their parents in 2015 – about 3.3million adult children – accounting for almost half of the nation’s 20-24 year olds and a fifth of all 25-29 year olds.

This correlates with a decline in the number of young adult homeowners, which has decreased from 55 per cent in 1996 to just 30 per cent in 2015 for 25 to 29 year olds and from 68 per cent to only 46 per cent for 30 to 34 year olds.

The research also cited an increasing need for extended education and training, a challenging jobs market and an increase in property and rental prices across the UK. Parents who are putting their children through university may face annual fees of up to £9,000 in the UK and an average student rent cost of £6,200. Those paying for their children to learn how to drive can expect to pay £1,130 in lessons alone (without license or test costs).

Meanwhile, the average annual rent in UK is £9,170, rising at 5 per cent a year on average and for those lucky enough to buy, the average deposit is about £44,000 – up more than 35 per cent in the past decade.

“Today’s parents are the first to face the perfect storm of expensive university fees, sky-high property prices and near unaffordable rents in cities, none of which they had to deal with themselves at their children’s age,” says Jasmine Birtles of MoneyMagpie.com. “Add in the increased difficulties that even graduates have to get a job and it’s clear the situation is far tougher for today’s twenty-somethings than it was when they were born.

“It’s quite right for parents to try to help their children in any way they can, but if they are to have a comfortable future themselves they will have to pick and choose what they help to fund and by how much. Maybe it’s time we taught our kids to be more realistic about things like weddings and gap years so that limited funds are spent on only the most important things like education and a home.”