The financial impact of having kids is well documented, but it appears supporting children well into adulthood is becoming the norm.
A new survey by Nationwide suggests that 85% of parents pay towards the cost of easing their offspring out of the family home, shelling out as much as £2,500. This includes the cost of helping children to buy items for university, or contributing towards a deposit on a property.
A fair portion of parents also fork out money on a regular basis thereafter, with 18% saying they hand over cash twice a month or more. Some even put themselves into debt to do so, with 6% using a credit card, 5% dipping into an overdraft and 3% taking out a personal loan.
Are you still supporting your children into adulthood? How long do you expect to be doing it for?
Doing it for the kids
It’s often suggested that millennials have it tougher than previous generations to secure themselves a stable financial footing.
Many find it tougher to reach the first rung of the property ladder than their parents did. The stats suggest that more parents are giving their children a leg-up as a result.
Last week, a Social Mobility Commission report suggested that one in three first-time buyers now receive a financial gift from family members.
Spiralling tuition fees might also be a reason why more parents are helping finance their children’s university studies too.
On the other hand, many parents may feel they’ve paid their dues for the first 18 years of their child’s life, and it’s now up to their offspring to support themselves. After all, learning to manage your own finances is an important part of becoming an adult.
The survey also touched on the emotional side of children fleeing the nest – 10% of parents surveyed felt distraught and a further 13% reported feeling lonely. In some cases, these handouts may double up as a bribe to ensure the kids still visit.
For me, a free meal or two was always enough motivation for me to go home when I was a struggling undergraduate.
What’s your attitude towards passing on money to your children? Is it ever worth putting yourself into debt? Are there are any reasons you wouldn’t support your kids, even if you could afford to?