proportion of young families borrowing from parents to pay childcare doubles in 12 months
single parents struggling the most
grandparents shelling out £1200 a year to help adult children
The proportion of young parents turning to their elderly relatives to pay for childcare costs has doubled in the last 12-months – and single parents are those most on the edge – according to research from engage Mutual.
At a time when the Government has poured millions into childcare1, British parents are still paying the most expensive childcare bills in Europe and the new engageMutual findings show that elderly relatives are footing the bill. Despite the introduction of childcare vouchers2 young parents are borrowing an average of £1,200 a year from the in-laws to cover growing childcare bills.
The findings are the latest from engage Mutual’s 3GB research – a study that explores the financial dependencies between the generations – children, parents and grandparents.
In a study tracking the money habits of 2000 people, engage Mutual asked grandparents with adult children (over the age of 25) what they had done, financially, to support their kids this year. The results give an indication of the pressure points facing young adults in Britain today.
Bank of Mum and Dad: Forget notions that the cost of raising children ends when they leave home. More than one in two parents with adult children (58%) claimed they were still shelling out for their children long after they had flown the nest. Parents in Scotland (66%) and London (63%) were those most likely to be bankrolling their adult children.
Childcare is the area where reliance on parental support has rocketed in the last year. The proportion of adults turning to their parents to help finance childcare has almost doubled in the last year (from 11% to 21%). Single parents are those most likely to be looking for parental support (29%). Overall, those helping their adult children with childcare costs claim to be shelling out an average of £598.42 every six months – equating to around £1,200 a year.
Dispelling notions that the London workers suffer the most from crippling childcare costs3, it is people in the South West (32%) and North East (28%) that are struggling most with childcare costs and turning to mum and dad for help.
2 Parents can save up to £2,390 with childcare vouchers. Source:www.childcarechoice.co.uk
3 Figures from The Day Care Trust suggest Londoners pay, on average, £168 a week per child for childcare (www.daycaretrust.org.uk)
Karl Elliott, 3GB spokesperson for engage Mutual said:
“Don’t be fooled by notions that the iPod generation has ushered in the age of the self reliant individual. As children reach adulthood, family members may live in different parts of the country – even the world -connected only by phone or email, but money is something that keeps the family as closely connected as it was years ago.”
“More than ever, personal finance in modern Britain is actually a matter of family finance. Parents are increasingly funding their children through adulthood, a process that goes well beyond university or first jobs. Conversely our research also shows that children, from as early as their mid twenties, are also supporting their elderly parents financially and we expect this to become more common in the years ahead.”
As a leading modern Mutual, engage offers financial services that respond to the modern family from simple, non-nonsense savings products for children, through to protection and whole of life products for the older customer.
1. additional research findings
- engage Mutual research also revealed that 16% of people are financially supporting their elderly relatives. The most common aspects of financial support mentioned were: Topping up their income and helping to pay essential utility and heating bills.
- people in the North East (21%) and Yorkshire (19%) are those most likely to financially support their elderly parents.
2. background facts on UK childcare
- according to the Daycare Trust (www.daycaretrust.org.uk), a charity which campaigns for better and more affordable childcare, childcare costs have continued to rise above the rate of inflation, and parents say they cannot pay any more.
- their 2004 Childcare Costs Survey found the typical cost of a nursery place for a child under 2 in 2004 is £134 a week (up from £128 a week in 2003), a rise of nearly 5%. This compares to an average household income of £562 a week and average weekly expenditure on housing and food combined of £82 a week.
- londoners, not surprisingly, are bearing the brunt of it, spending, on average £168 a week per child on a private nursery, or over £8730 a year.
3. general information
- ‘3GB’ is engage’s Three Generation Britain research index. Research was conducted by YouGov across a GB representative of 2,000 adults in July 2007.
The research explores the financial relationships of care between the generations and investigates shifts in traditional financial provision.
- For product information engage Mutual 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:
- this research was undertaken by YouGov on behalf of engage Mutual Assurance. The survey was conducted between 5th and 7th June 2007 across a representative GB sample of 2,272
- if using this article on a website, please link to www.engagemutual.com using the following hyperlink text : http://www.engagemutual.com engage Mutual Assurance – meeting the changing needs of today’s modern families
- engage Mutual Assurance is a trading style of Homeowners Friendly Society (HFSL) and it’s wholly-owned subsidiary engage Mutual Funds Limited (EMFL).
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.
- 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.
- established in 1980, Homeowners Friendly Society Limited (HFSL) is Registered and Incorporated under the Friendly Societies Act 1992, Reg.No.964F, it’s wholly owned subsidiary engage Mutual Funds Limited (eMFL) is Registered in England No 3224780. Both are authorised and regulated by the Financial Services Authority (FSA).
- Homeowners Friendly Society Limited’s FSA Register number is 110072 andengage Mutual Funds Limited’s FSA Register number is 181487. You can check this on the FSA’s Register by visiting the FSA’s website www.fsa.gov.uk/register or by contacting the FSA on 0845 606 1234