Young parents need to wake up to the costs of parenting if they think they'll be free of the burden of their children by the time they're 50, according to new research by engage Mutual Assurance. The findings show that, as reality dawns, British parents expect to be bankrolling their kids well into their mid sixties. What's more, with financial commitments lasting longer than anticipated, British parents are forgoing aspirations from their youth.
With 46% of parents with children over the age of 25 still supporting them financially1, the BOMAD generation are banking on mum and dad well into their sixties. Despite parents in their twenties expecting to regain financial independence from their children by the age of 50, the research shows that, in reality 43 percent of parents aged 55 to 64 are still supporting their children, and do not expect to gain financial freedom until the age of 67.
As part of it's 3GB campaign to unearth the financial interdependencies between three generation Britain2, engage Mutual Assurance asked a GB representative sample of 2,298 parents3 when they expected to be able to afford common life-stage goals including buying a second home and retiring and when they anticipated no longer supporting their children financially. The results reveal how parents' expectations change as financial reality hits.
key findings
parents supporting children
- 45 percent of over 50 year olds are still supporting their children financially, almost one in ten (9%) expecting to be bank rolling their kids beyond 60.
- the average British parent anticipates providing financial support to their children until the age of 59.
- parents in the West Country expect to be bank rolling their offspring for the longest, anticipating reaching the age of 65 before cutting the purse strings, compared to parents in Lancashire who are most optimistic, expecting not to support the kids past 57
parents delaying plans
- with the realisation that they will be funding kids for longer, British parents are curtailing life stage aspirations. Parents aged 18 to 24 years old anticipate retiring 3 years earlier than 55 to 64 year olds. Furthermore, the proportion accepting that they will never be able to afford to buy a second home increases dramatically with age, 27 percent of 18 to 24 year olds realising that they will never buy a second home compared to 70 percent of 55 to 64 year olds
Karl Elliott, 3GB spokesperson for engage said:
“University tuition fees, rising costs of living and house price hikes mean that young people are finding it increasingly difficult to gain financial independence. As a result of this pressure on younger generations, parents are shouldering the financial burden, supporting their children for longer.”
“This research shows that the expectations of younger parents are not always realistic. In reality it is likely that they will continue to support their kids financially for longer than they anticipate. It is therefore essential that parents of younger children lay down plans to save little and often in order to ensure that their child's needs don't affect their future independence”
footnotes
1 research released by engage Mutual Assurance in August 2006, carried out by YouGov across a GB representative sample of 2,000
2 3GB or '3 Generation Britain' is an ongoing quarterly research initiative by engage Mutual Assurance to understand how financial ties impact on family relationships. More information is available at www.engagemutual.com/3GB.
3 research was conducted by YouGov across a GB representative sample of 4,640 adults in October 2006 and included 2,298 parents.
engageMutual Assurance can be contacted on 0800 169 4321 or by visiting www.engagemutual.com
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
notes to Editor:
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if using this article on a website, please link to www.engagemutual.com using the following hyperlink text : www.engagemutual.com engage Mutual Assurance - meeting the changing needs of today's modern families
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engage Mutual Assurance is a trading style of Homeowners Friendly Society (HFSL) and it's wholly-owned subsidiary engage Mutual Funds Limited (EMFL).
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engage Mutual Funds Limited (EMFL) is a provider of the Child Trust Fund direct and in partnership with partners including Legal and General, ASDA and Debenhams stores and NAAFI Financial.
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the organisation is title sponsor of the engage Super League - which sees 12 teams from across the UK and France battling for a place in the >engage Super League Grand Final at Old Trafford stadium in Manchester. The teams are Leeds Rhinos, Wigan Warriors, Bradford Bulls, Castleford Tigers, St Helens, Huddersfield Giants, Hull FC, Salford City Reds, Wakefield Trinity Wildcats, Warrington Wolves, London based Harlequins RL and French team Catalans Dragons.
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engage is proud to partner a charity which shares our consideration for balancing risk and reward - Smart Risk Foundation UK. It helps youngsters across the UK to identify the risks in their everyday lives in the smartest way, so that they can enjoy life to the fullest. Smart Risk Foundation's registered charity number is 1096081, www.smartrisk.org.uk.
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engage Mutual Assurance is headline sponsor of the engage International Open 2006 and the engage Ladies World Matchplay 2007, both part of the World Bowls Tour.
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engage supports mutuality, friendly societies and the regional financial services industry through links with the Association of Mutual Insurers, the Association of Friendly Societies, Mutuo and Leeds Financial Services Initiative.
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established in 1980, Homeowners Friendly Society Limited (HFSL) is Re
