Parents pay £34bn to support adult children | Money | The Observer - Thanks to Mike Briercliffe for pointing this article out

Parents pay £34bn to support adult children

In past year 13 million parents paid out in loans and gifts to help cash-strapped adult dependants, study finds

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• Mark King
• guardian.co.uk, Saturday 10 September 2011 22.58 BST
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A Peter Pan-like generation of adults, who will not or cannot become financially self-sufficient, are relying on their parents into their forties and beyond.

While some people are struggling to administer their elderly parents' financial affairs, spare a thought for older parents who are having to support cash-strapped adult children.

More than 13 million parents paid out £34bn in loans and gifts in the past year to help support their financially embarrassed offspring, at an average £2,480 a year, according to research for Sainsbury's Finance.

Many of these "adult-dependants" are still financially dependent on their parents well into their forties, a Peter Pan-like generation who will not or cannot become financially self-sufficient.

Although few parents have the wealth of Tony and Cherie Blair, who helped their son Euan buy a £1.3m home in 2010 and are reported to have bought similarly expensive homes for siblings Kathryn and Nicky, the research suggests that last year parents lent their grown-up offspring a collective £8.4bn for mortgage or rental deposits and payments, £3.5bn for home improvements and £2.2bn to pay off debts. Some 3.5 million parents have also helped pay their grandchildren's schooling or other expenses. More than £1.6bn has been lent or given for tuition fees and student living expenses in the past year.

The most cash (£11.4bn) was gifted or loaned to adult children between the ages of 35 and 39, although more than a million parents gave financial handouts to their children over the age of 45 – an average of £2,437 each in loans and gifts. Parents have given a further 1.7 million adult-dependants in their early forties an average £1,882 each in the past 12 months.

Between the ages of 18 and 29, female "adult-dependants" are more needy, the research suggests, having on average borrowed £2,427 from their parents in the past 12 months, compared to £1,113 for males of the same age. However, women in their thirties are slightly more self-sufficient, receiving an average £2,017 from their parents in the past year. By contrast, males in their thirties become even more financially reliant on their parents; those taking financial help got an average of £5,542 in the past year.

Helen Williams, head of Sainsbury's Life Insurance, says: "Rising university and living costs, a tough job market and a difficult climate for first-time buyers mean children are staying, to some extent, financially dependent on their parents often well into adulthood."

Sainsbury's Finance, unsurprisingly, says the research indicates a wider need for life insurance among older people who, were they to die unexpectedly, might leave their adult dependents in need. But it is the government who might wish to think over the implications of a generation that needs their parents' help well into adult life.

via guardian.co.uk