Research by engage Mutual over the course of 2007 revealed that:
- 46 per cent of parents with children over the age of 25 still support them financially and do not expect to gain financial freedom until they are over 60;
- More than one in two parents are now unable or unwilling to support their children’s living costs through university, 46 per cent expecting their children to pay for their own tuition fees; and
- The proportion of young families borrowing from parents to pay for childcare has doubled in the last year, from 11 per cent to 21 per cent.
engage Mutual’s 3GB or “Three Generation Britain” research has been running since 2006, as part of the mutual’s ongoing commitment to understanding the financial needs of modern families. Throughout 2007, engage Mutual asked over 8,000 people how money impacted their family relationships. The research has enabled engageMutual to recognise the need for development of specific products to suit the needs of the modern British family.
Below are some key findings resulting from the research that was conducted in 2007:
adult children relying on parents for longer
With increased living costs and difficulties for young people in moving onto the property ladder, children are dependant on their parents for financial support. These children have been dubbed as coming from the BOMAD generation (relying on the Bank of Mum and Dad), with 46 per cent of parents with children over the age of 25 still supporting them financially and not expecting to gain financial freedom until their 60s. The number of adult children turning to their parents to afford childcare has doubled in the last year (from 11% to 21%), with single parents most likely to do so (29%).
parents thinking ahead for their offspring
With pressures to save ahead for their children’s future as prices continue to rise and children become more dependent on Mum and Dad, one in two (52%) parents do not give their children pocket money. They prefer to save the money they would give as pocket money and put it aside for the child’s future. And of those who have CTFs for their children with Engage Mutual, those with twins are more likely to pay regularly into their child’s account than those without twins (58% compared to 41%).
children having to support their elderly parents
With many having to retire later in life due to high living costs, one in four adult children (25%) are having to contribute towards their parents’ retirement to enable them to give up work and not run into debt.
young people will never get out of debt
Despite money matters putting Britain’s younger generations off tying the knot and flying the nest, today’s under 25’s anticipate buying their first home before their grandparents did. One third of Britons under 25 (34%) anticipate waiting until they are at least 24 before being able afford to move out of their parents’ home. Today’s retirees fled the nest three years earlier at the age of 21.
Under 25’s are expecting to be able to afford marriage at 27.7 years old, three and a half years later than their grandparent’s wed (at 23.2), but in contrast they expect to be able to afford to buy their first home at 28, nine months before their grandparents set foot on the property ladder, suggesting their readiness to take on debt.
couples supporting each other through tough times
Despite the alarm over difficult financial issues, the research from engage Mutual shows that couples will pull together to support each other. 88 per cent of couples would make sacrifices to ensure their partner is financially comfortable, with almost one in three couples (30%) prepared to cut back on luxuries for themselves and just under one in five ready to endure extra hours at work (19%) to keep their loved one in the manner to which they are accustomed.
Karl Elliott, 3GB Spokesperson for Engage Mutual Assurance, said:
“ Over the course of 2007, we’ve seen family relationships strained by money matters. Rising costs in Britain mean that not only do families need to plan ahead financially and carefully manage their money, they are also turning to each other for support. As a mutual society, Engage Mutual, which prides itself on customer engagement, is more aware than most financial providers of the pressures on the modern British family. We are committed to addressing families financial needs and have introduced products such as our Junior Easy Save account for children which enables parents to save tax free for children who missed the CTF deadline.”
notes to Editors:
- the research was undertaken by YouGov on behalf of engage Mutual Assurance. This research was conducted through four surveys of over 2,000 people throughout 2007.
- if using this article on a website, please link to www.engagemutual.com using the following hyperlink text: engage Mutual Assurance – meeting the changing needs of todays 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, General and ASDA 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