A financial challenge often faced by our clients is being a part of the sandwich generation; squeezed between making provision for adult children and elderly parents.
According to the latest figures from ONS UK Labour Force Survey 2013, there were 2.7 million households in the UK with adult children living at home.
Those adult children are sometimes called the Peter Pan generation and they are costing their folks an awful lot of money.
New research by Scottish Widows has found that adult children are financially dependent on their family for a range of expenditure, from bed and board to Netflix subscriptions.
In fact, this Peter Pan generation could be costing parents up to £1.2bn a year.
The research comes from the Scottish Widows Centre for the Modern Family and found that parents with adult children living at home spend extra £456 a year just on their children compared to ‘empty nesters’. This is up from £372 in 2014.
Parents are not only covering the cost of bed and board for their adult children, but also luxuries including phone bills and Netflix subscriptions, with a fifth of parents paying mobile phone bills on behalf of their kids and one in ten splashing out on Internet television.
This reliance on the Bank of Mum and Dad could of course have a major impact on their quality of living in later life. A quarter of parents admitted to researchers that they don’t expect to get back the money they loaned to their grown up kids.
A quarter of parents with adult children living at home say lack of financial security is having the biggest impact on their quality of life today, in comparison to 19% of empty nesters.
Over a fifth of these full nesters have had to take out a loan, a credit card or go overdrawn to meet their increased living costs, compared to just 9% of empty nesters.
Of course as parents we feel an obligation to our children, regardless of their age, and especially if we can afford to give them what they need in life.
Anita Frew, Chair, Centre for the Modern Family said:
“The Scottish Widows Centre for the Modern Family first uncovered the impact of the full nest on parents’ finances in 2014 – but this latest research suggests that two years on, the financial burden has worsened, with the Bank of Mum and Dad now having to extend its services to fund luxuries like holidays and entertainment subscriptions.
“While it is heartening to see that the UK’s families are so willing to support one another, we are in danger of nurturing a ‘Peter Pan’ generation of children who are reliant on their parents well into adulthood for all types of spending – which could have a major impact on parents’ finances for later life.”
