Some of us close the Bank of Mom and Dad when our kids graduate from college or when they finish their grad school degrees. Some of us do it even earlier--when the kids have a high school diploma in hand and leave home for college or a job. To each their own.
Regardless of whether the bank is open or not, at what age should we expect our kids to be financial grown ups? A new research survey in the United Kingdom asked parents that question. The answer was pretty surprising.
According to the Sainsbury's Bank survey, UK parents pegged financial independence--that is, the age at which the parents can stop having to help their kids out financially--at 29. That's well past the college grad age. The mums seemed to be a softer touch than the dads. Women expected to support their children until they are 30; men saw the cutoff as 27.
Many of the parents reported taking out loans to help out their kids, half the loans being for their child's education or to pay for the wedding. Other reasons for loans: medical expenses, cars and help with household expenses. The average value across all loans stood at the U.S. equivalence of $14,000.
Survey analysts pointed out a reality behind the expenses that would seem to hold true here: While it is becoming more common for adult children to pay for their own wedding, the cost has gotten so high that help is needed. Ditto with college and grad school costs.
Parents in the U.K. aren't just doling out cash. A quarter of adult children aged 20 to 34 are bunking in with their parents, up from 21 percent twenty years ago. Given that shift, it's not surprising the rate of home ownership by 25-29 year-olds dipped from 55 percent in 1996 to 30 percent in 2016; for 30-to-34 years-olds, the change is even more startling, given that this is an age at which married cojuples expand their family size. Home ownership, however, is down from 68 percent twenty years ago to 46 percent today.
Here's what the author of the bank's Family Finance Report had to say about the changing times in the U.K.:"Today's parents are the first to face the perfect storm of expensive university fees, sky-high property prices and near unaffordable rents in cities, none of which they had to deal with themselves at their children's age. Add in the increased difficulties that even graduates have to get a job and it's clear the situation is far tougher for today's twenty-somethings than it was when they were born."
These are, of course, first world country concerns--we should be happy to have them. But they also suggest that, though we as parents are stepping in to help, there's a lot of financial unease and discontent among our 20-somethings and their older siblings.
