Recent research has found that 24% of those aged 18－44 would be unable to afford their lifestyle without financial help from their parents, although 35% of the same age group do receive assistance.
Guarantor Loan Comparison, the company which carried out the study featuring respondents from 147 businesses, has announced the results of the Financial Insights Survey. The findings present a fresh and disturbing insight into the plight of young people who struggle to afford the basics of life.
The survey asked parents how much financial help they give their children and the reasons for doing so.
The results show that only 28% of the 18－44 age group are satisfied with their financial situation; confirmation, if it were needed, that money matters are of considerable concern to this group.
The young adults were asked which financial topics they have difficulty in understanding and which lifestyle costs parents subsidise.
Over the past year parents have helped:
- 55% of young adults with monthly bills, such as gym memberships and phone contracts
- 51% with food shopping
- 33% with car costs
- 18% with a contribution towards holiday costs
A majority of the 18－44 age group receive help from parents to pay bills, although most young adults said housing was their major worry.
Climbing the property ladder
The study found that young adults do request their parents’ direct and indirect help to enable them to climb the property ladder.
So it comes as no surprise that the well-worn phrase – the bank of mum and dad – in relation to the housing market, is still very much in use.
Although 26% of the age group received a contribution towards the deposit on a property and 13% were helped with rental or mortgage payments in the last year, a greater number of adults were able to increase their savings.
39% of parents with children over the age of 18 have allowed them to live at home rent-free over the last year. Even though a majority are below the age of 20, the data gathered shows that 5% of those aged 25–30 also live at home rent-free. Which means that with no rent or bills to pay, they are able to begin building a nest egg to buy their own property.
People across all age groups consider housing to be the issue for which they need most support from parents. 46% said their greatest concerns were buying property and paying mortgages; 23% cited debt; 16% mentioned budgeting and 16% referred to savings.
Parents and financial advice
It is apparent that women outperform men when it comes to discussing these concerns.
The study uncovered a definite gender bias regarding parental advice on financial topics. Mothers were much more likely than fathers to address a number of subjects with their adult children, such as:
- Credit scores – 63% of mums but only 27% of dads said they would discuss this with their adult children
- Debt – 70% of mums compared to 59% of dads were happy to talk about this
- Budgeting – 78% of mums in contrast to 41% of dads would mention budgets
But parents are united when it comes to the financial education of their children. A large majority, 78%, said they believed they were responsible for teaching children about managing money, although 73% also thought that secondary schools should be more proactive in this matter.
Furthermore, 35% of parents are of the opinion that the government should play a larger role in promoting financial responsibility in the young.