New look Lloyds Branch
The so-called 'Bank of Mum and Dad' now hands out £44bn a year to the UK's children.
The Lloyds Bank Family Savings Report, in association with the Future Foundation, looked at household savings trends and the dynamics of family saving in the UK.
The research looked into savings in relation to the family. It found:
• 70% of young adults now receive some form of financial support from their parents after they leave home
• Money for houses (£11.3bn), cars (£4.4bn) and weddings (£4.3bn) are the biggest expenses for UK parents supporting their children
• It is estimated that 4.25 million UK adults aged 18+ currently live with their parents
The findings show adult children in the UK have an increasing reliance on the 'Bank of Mum and Dad', with a total of £44bn being handed out each year.
There is a clear increase in demand for parental financial support, says Lloyds, in addition to the well known trend towards young adults living at home with their parents for longer. The report found that 70% of young adults now receive some form of financial support from their parents after they leave home, compared with only 53% during the 1970s.
The proportion of young adults receiving their parents' help with rent payments has more than trebled from 6% to 20% today. The proportion receiving their parents' help with utility bills and day-to-day living expenses has also trebled, from 5% to 15%, and 7% to 22% respectively.
{desktop}{/desktop}{mobile}{/mobile}The research shows that money for houses (£11.3bn), cars (£4.4bn) and weddings (£4.3bn) are the biggest 'single bills' for UK parents supporting their children and an additional £5.2bn is given out each year in cash gifts that are not contributing towards a specific cost or purchase.
The 25-29 year old age bracket demands the most from parents and on average £2,599 is given to them annually per UK adult, significantly more than the average of £1,125 across all age groups. Of the £2,599 given to the average 25-29 year old in a year, £606 goes towards the cost of buying a home, £462 toward a wedding and £429 towards paying off credit card bills and debts.
The report shows that by living at home with parents, a typical young adult will save around £4,844 per year, by comparison with living independently. Over £2,000 a year is saved on rent, £795 on essential bills and £735 on food.
Andy Bickers, director of savings at Lloyds Bank, said: "The last two decades have seen a massive increase in the financial demands made on parents by their adult children. "
