Just 40% of parents living with older children say their family is financially secure

Families are today knee-deep in debt, but rather than a young brood in need of financing it seems it’s the big kids that are draining the Bank of Mum and Dad. New research from Mintel reveals that among parents living with children over the age of 18, just two in five (40%) say their family is financially secure, compared to nearly half (48%) of parents living with children under the age of 18.

Indeed, it seems the strain of supporting older children in the home is having a knock-on impact on parents’ finances as one in five (20%) with children over the age of 18 living at home have more than £10,000 in unsecured debt. Additionally, one in five (20%) parents who owe money on credit say they struggle to meet the repayments, rising to almost one in five (24%) of those with children over the age of 18.

However, rather than an unexpected burden, it seems that supporting adult children is something that parents have come to anticipate whether they live with them or not. Overall, 62% of parents say they are worried about their children’s future financial security, while 64% say they expect to help their children financially after leaving home. Furthermore, many are already saving for their children’s future milestones. Over one third (38%) of parents say that saving for their children for things such as a house deposit, wedding, or car, is one of their biggest financial priorities.

20% of Brits with children over the age of 18 living at home have more than £10,000 in unsecured debt

Jessica Galletley, Financial Services Analyst at Mintel, said:

“More children are choosing to remain living at home with their parents beyond the age of 18. This is driven by the fact that young adults can find it difficult to find employment after school or university, which combined with the high cost of renting, means many cannot afford to move out. Even some of those who are employed and financially independent are choosing to remain at home in order to save for a house deposit, or to repay the high levels of debt often accrued during university. As such, their need for additional financial support is affecting parents.”

But it’s not just live-in children who are relying on their parents as Mintel research indicates that many adults over the age of 20 rely on friends and family to pay off their loans. On average, 6% of people who owe money say that they expect to manage or to pay off debts by borrowing from family or friends; however this rises to 15% among 20-24 year olds and 12% of those aged 25-34. Additionally, while 6% of all Brits say that they expect to pay off their debts using an inheritance, this rises to 11% of those aged 18-24.

And it seems there is cause for concern when it comes to the amount young Brits have to repay. Over three in five (63%) Brits aged 20-24 are in debt, with 17% owing over £10,000 in unsecured debt. Similarly, 76% of those aged 25-35 are in debt, with 22% owing over £10,000.

“Younger adults are leaving university with high levels of debt, putting them at a disadvantage when it comes to saving towards property ownership. They are also less likely to have built up a decent credit score, meaning there are fewer credit products available to them; as such, they are relying on family and friends. Lending or giving money to adult children is an additional financial commitment for parents who would normally be reducing their outgoings as they pay off mortgage debt and try to build their retirement savings.” Jessica comments.

Despite the number of young Brits in debt, it seems that they are far from carefree when it comes to borrowing money. Over four in five (82%) Brits aged 18-24 who owe money on credit products say it’s best to avoid borrowing money wherever possible, as do 72% of those aged 25-34.

On the other hand, the stigma surrounding borrowing money is fading. Mintel research reveals that two thirds (66%) of Brits aged 18-24 and 61% of those aged 25-34 agree it’s socially acceptable to have debt or use credit, compared to 56% of those aged 55-64.

“People generally feel uncomfortable talking about money and their financial situation, and there can be an element of shame to having debt, as it is associated with living beyond one’s means. However, as younger consumers are more likely to agree that it is socially acceptable to have debt or use credit, it signals a decline in the negative stigma around using credit.” Jessica adds.

Finally, while Sting and Simon Cowell made headlines by saying they won’t be passing on their wealth to their children, it seems that this is a view shared by the majority of parents. Less than two in five (38%) agree that it’s important to be able to leave an inheritance for your children. But it is a case of the more money you have, the more likely you are to agree with this statement: half (50%) of those with a household income of £50,000 or over say it’s important to be able to leave an inheritance to your children, compared to one quarter (26%) of those with a household income of less than £15,500.

“Passing on inheritance is a long-standing practice, and one that many family members expect to receive. However, younger generations are today becoming increasingly reliant on both their parents and grandparents for financial support, to fund higher education or help them get onto the housing ladder. This has led to a trend towards ‘living inheritance’ whereby money is used to help families as and when they need it, rather than later in life when most families’ finances are in a more stable position.” Jessica concludes.

Press review copies of the Family Finances UK 2016 and  Consumer Attitudes Towards Debt UK 2016 reports and interviews with Financial Services Analyst Jessica Galletley are available on request from the press office.