New figures from the ONS have highlighted the changing shape of family life in the UK, with home alone over 65s and full nest parents having implications for retirement and financial planning.
The figures show that more over-65s are living alone and more young adults are living with their parents than ever before.
According to analysis of the figures by Aviva, the traditional shape of family life – from starting life to retirement – is now a thing of the past.
More than 3.64 million people over age 65 are now living alone in the UK, according to the ONS figures.
This represents the highest level since records began in 1996 and means than one in three over 65s now live alone.
Since 1996 the number of adults of all ages living alone has increased by 16%, during a time when the UK housing stock has risen by just 14%.
This is invariably placing further upwards pressure on house prices, which rose by an average of 8.4% during the past year.
These rising house prices are having an impact on young adults who are now increasingly returning home to live with their parents.
The number of young adults ages 21 to 34 living with their parents has reached a new high of 2.9 million.
Back in 2002, the figure was 2 million. It means that one in four young adults in this age bracket now live at home with their parents.
According to Alistair McQueen, Saving & Retirement Manager at Aviva:
“Family life is changing. The long-standing tradition of leaving home, then getting a job, then getting married, then having children and then retiring is a thing of the past.
“More people are living alone and more young adults are staying with their parents for longer, before finding their own place.
“Change brings new pressures. Individuals are having to develop a greater acceptance of uncertainty, and companies are having to adapt their products and services to meet different needs.
“Despite this change and uncertainty, the need to save for the future has not gone away. Nor has the desire to live a full later life.”
These adult children living at home could be costing parents £1.25 billion a year in additional expenses.
Jackie Leiper, Centre for the Modern Family panellist said:
“With 2,751,000 households in the UK now including adult children living at home, it’s heartening to see that parents are doing so much to support their children well into adulthood.
“However, our research suggests that supporting adult children living at home could be costing the UK’s ‘full-nest’ parents £1.25 billion a year, and far from covering just the essentials, parents are picking up the bill for luxuries such as haircuts and entertainment subscriptions.
“While the eagerness of parents to give their grown-up children a comfortable lifestyle is commendable, full-nesters need to make sure that this isn’t jeopardising their own future financial security.”
If you have adult children who are returning to live at home, it is important to consider the impact on your financial plans for retirement.
Additional expenses could reduce your ability to save for the future.
Whilst most parents will want to give their children every possible opportunity in life, and recognise the increasingly unaffordable prospect of home ownership in early adulthood, it is important to make spending decision in the context of a long-term financial plan.
