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When do children financially grow up?

When do children financially grow up?

Category: Money

Updated: 21/09/2016
First Published: 20/09/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

As great as it is to watch your children grow up and become their own people, there comes a point when you are ready for them to be grown up enough for you to stop having to help them out financially. However, new research from Sainsbury's Bank reveals that parents expect this to happen when their child turns 29, far later than many would imagine.

The Bank's survey further revealed that women expect financial independence to take longer than men, with women expecting to support their children until they are 30, while men expect to give financial support until the age of 27. And this financial help comes at quite a cost to the parents; the Bank's loans data showed that last year British parents took out nearly £2 million in loans to support their children.

Nearly half of these loans were taken out to support a child's wedding, at an average amount of £12,395, while the largest loans were taken out to help children cover the cost of education, at £13,039 on average. Other big expenses included loans for medical expenses (£12,850), cars (£9,590) and help with household expenses (£8,035). The average value across loans stood at £11,179.

This reflects the current reality that, while it is becoming more common for children to pay for their own wedding, the cost has risen by such an amount that help is often inevitable. The same goes for university, with the rising cost of education (in terms of fees in England and rent costs across the country) making it hard for parents to resist helping their children shoulder the burden of debt.

Jasmine Birtles, founder of MoneyMagpie and author of the Sainsbury's Bank Family Finance Report, reflected on the changing times: "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. 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."

This may be why so many parents are inclined to help their children with various life events, with their child's significant birthdays (16, 18 and 21) being what most parents expect to pay for (52%). Other expected expenses include their child's driving lessons (50%), wedding (40%), first car (38%) and university living expenses (38%). Parents are the least inclined to cover gap year travel (at only 8%), with more expecting to help out with regular finances (18%), property purchases (21%) and rent/deposits (23%).

Parents' support goes beyond cash, however, with an analysis of ONS data suggesting that more than 3.3 million adult children (aged 20 to 34) were living with their parents in the UK last year, representing over a quarter (26%) of their age group. This is 618,000 more than in 1996, when 2.7 million adult children lived with their parents, representing just over a fifth (21%) of their age group. This appears to correlate with a decline in the number of young adult homeowners, which has decreased from 55% in 1996 to just 30% in 2015 for 25-to-29 year-olds, and from 68% to 46% for 30-to-34 year-olds.

What can be done about these troubling statistics, if anything? It's important to teach your child to be sensible with money from an early age; a Junior ISA or children's savings account could be a great way to teach them how to save money and accumulate interest, and they may be able to use this to help with costs or buy their first car, decreasing their dependence on the bank of Mum and Dad in the process.

A sensible approach to money could also prevent children from asking their parents for help with paying for non-essentials. This sentiment is shared by Jasmine, who said: "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."

Parents may also be able to pre-empt some future money requests by setting up a long-term savings account as early in their child's life as possible, and if they end up having to take out a loan, they should be savvy about who they choose to go into debt with. In the end, it's up to each parent and their child to decide together what's worth going into debt for, and for how much.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.