Consumer: Young people relying on parents’ cash help

Young people are increasingly relying on parents for cash for deposits, purchases and bills.
Young people are increasingly relying on parents for cash for deposits, purchases and bills.
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More young adults than ever are relying on financial support from their parents to make ends meet.

The number of residents getting help from the bank of mum and dad has risen a fifth in the last two years.

In 2015 alone, parents handed over £30.65billion to their adult children aged between 18 and 24 - up 21 per cent from £25.38 billion in 2013.

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The figures, from the 2015 Lloyds Bank Family Savings Report, show that assistance from their parents helps many people pay for a deposit for a house or major purchases such as a wedding or new car.

But, increasingly, people are relying on the extra cash for everyday expenses such as rent payments and household bills. The survey found that rent payments alone have almost doubled (up from £2.4 billion to £4.1 billion) in the last two years.

Philip Robinson, savings director for Lloyds Bank, said: “There is an increasingly clear majority of UK families which now endorse a strong financial role for parents, expressing a sense of financial duty to future generations. “However, parents must sometimes feel that they are on a merry-go-round with their grown up children’s financial needs. As we move away from demands for cash debt relief and help with energy bills, we see increases in demands for more fundamental help with housing costs and big-ticket purchases.”

As well as help from parents, the report revealed that grandparents are helping out to the tune of £6billion, meaning young adults across the country have received handouts of £37billion pounds this year. This averages out at £916 for every 18 to 24-year-old in the UK, with £763 of that coming from parents.

The report shows the trend could continue in the future - 67 per cent of UK adults feel that children cannot hope to achieve success without cash from their parents, and almost three-quarters (74 per cent) believe that parental financial support will become more important in the future. 68 per cent of adults would feel like they were letting their family down if they did not save for the future.

The research also looked at how much influence parents have over their grown-up children’s lives in relation to how much support they provide. It found parents are continuing to provide higher levels of financial support, but are demanding more in return in terms of power and influence.

Mr Robinson said: “For young adults today increased levels of parental support very much come with strings attached. Our latest research confirms that this is a lively trend.

“For today’s young adults, the majority are increasingly heavily financed, and heavily influenced, by their parents.”

HOW PARENTS ARE HELPING OUT

Financial support from parents is helping young adults in a variety of ways.

Two million young adults (5.1 per cent) get help with their rent, with average yearly handouts of £2,053 per person.

Around 3.2million people need help with day to day purchases such as food shopping or petrol, at an average of £772 a year per person.

A further 1.19million young adults (three per cent) get an average of £1.367 to help pay off their credit cards or other debts.

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