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Increasing reliance on the Bank of Mum and Dad

Increasing reliance on the Bank of Mum and Dad

Category: Money

Updated: 06/11/2013
First Published: 06/11/2013

MONEYFACTS ARCHIVE
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Research from Lloyds Bank has revealed that adult children in the UK are becoming increasingly reliant on the "Bank of Mum and Dad", showing the continued demand for parental financial support both when children live at home and after they've flown the nest.

The Lloyds Bank Family Savings Report has revealed the true extent of this reliance, with 70% of young adults involved in the study receiving some form of financial support from their parents once they leave home.

On average, a typical 25-29 year old will receive £2,599 per year from their parents, with money for buying a home and/or paying rent, weddings, car purchases and help towards paying off debt being the biggest expenses.

In fact, 20% of young adults now receive financial help to pay rent, 15% ask for help towards utility bills and 22% ask for help to fund day-to-day living expenses, with the figures having increased dramatically since the 1970s.

It isn't just those that have flown the nest either. There's a clear trend towards children living with their parents for longer, with an increasing number of young adults staying in the family home – an estimated 4.25 million in fact.

In doing so it means that parents are, in many cases, providing free accommodation, energy and food, with the typical young adult being able to save around £4,844 per year by living at home.

But despite more children being reliant on their parents, the report also highlighted the fact that it's the parents themselves who feel a commitment to providing that kind of help, with around two thirds (or 68%) feeling that their children won't be able to achieve success in life without financial support.

A further 76% of respondents feel that parental financial support will become even more important in the future, perhaps in response to ever-rising living costs, which has led industry experts to encourage parents to instil the savings habit in their children.

Andy Bickers, director of savings at Lloyds Bank, commented:

"The last two decades have seen a massive increase in the financial demands made on parents by their adult children, and now more than ever, saving for the future is really important.

"To get children into the savings habit it's best to start early, by parents encouraging them to put money aside each month as they start earning, and over time they too can think about putting money away for their own children as they get older."

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