At a time when working-age Britons face an uncertain future1, research suggests young people may be relying financially on their parents more than ever.
As part of its 3GB2 campaign examining how money shapes family relationships, Engage Mutual asked parents across the UK how they had helped their grown-up children financially in the six month period to 1 September 2008. The research suggests that at a time when they should have long since flown the nest and established financial independence, many over 25s are still in receipt of hand-outs from mum and dad.
Key findings amongst parents financially donating to over 25s
- As home loan approval rates have reached a record low3, and negotiating the property ladder is becoming more challenging, more than four in ten (46%) parents helped to cover the cost of moving house or buying a new home.
- Parents have stepped in as education has become increasingly hard to afford (the average student debt has risen to £17,5004), 23% say they helped pay for education, or to pay back a student loan.
- With the concept of saving barely registering on the radar of many 20-somethings5, one in ten parents of over 25s made regular payments into their grown up children’s saving accounts (11%)
Nick Breton, 3GB spokesperson for engage Mutual Assurance said:
"British parents are providing more financial support to their adult children who are finding it increasingly difficult to stand on their own financial feet.”
“Many parents understand the benefits of being financially prepared for life’s eventualities. engage offers a range of investment and tax-favoured savings solutions which aim to help parents and their children, prepare to meet some of the challenges and uncertainties that lie ahead.”
1. the Guardian, 14 September 2008,http://www.guardian.co.uk/business/2008/sep/14/economics.redundancy
2. 3GB is engage’s Three Generation Britain research index. Research was conducted by YouGov across a GB representative of 2019 adults between August 29th – 1 September 2008. The research explores the financial relationships of care between the generations and investigates shifts in traditional financial provision. The Where information refers to parents, data on the eldest child was used.
3. the Independent, 24 September 2008http://www.independent.co.uk/news/business/news/home-loan-approvals-are-lowest-on-record-940331.html
4. the Guardian, 18 June 2008,http://www.guardian.co.uk/money/2008/jun/18/studentfinance.familyfinance
5. Reform Report on the IPOD generation, co-authored with the Chartered Insurance Institute, October 2008
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 Editors:
1. engage Mutual Assurance is a trading name of Homeowners Friendly Society Ltd (HFSL), Registered and incorporated under the Friendly Societies Act 1992, Registered number 964F and its wholly-owned subsidiaries, engage Mutual Funds Limited (eMFL) and engage Mutual Insurance Ltd (eMIL). Both HFSL and eMFL are authorised and regulated by the Financial Services Authority (FSA). HFSL’s Register number is 110072, eMFL’s Register number is 181487. eMIL is authorised to conduct general insurance business by the Gibraltar Financial Services Commission and is regulated by the Financial Services Authority for the conduct of UK business. eMIL’s FSA Register No is 485680. You can check this on the FSA’s Register by visiting the FSA website www.fsa.gov.uk/register or by contacting the FSA on 0845 606 1234.
2. engage is one of the larger UK mutuals providing simple, value for money savings, protection and investment products. It currently helps over 420,000 customers of all ages to protect, preserve or enhance their welfare, with some of the most straightforward products on the market. engage prides itself on being a family-oriented, modern mutual, providing products that help enable households of all kinds to plan their finances to help meet their future needs. More information on engage Mutual is available at www.engagemutual.com
3. 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.
4. engage Mutual Funds Limited (EMFL) is a provider of the Child Trust Fund direct and in partnership with organisations including Yorkshire Building Society and Scarborough Building Society.
5. engage Mutual has been the title sponsor of the Rugby Super League since 2005 and has extended its agreement to 2010.
6. engage Mutual announced its entry into the health cash plan market in July 2008 following an agreement of partnership with Wakefield & District Hospital’s Contributory Scheme (WDHCS). Further to this, 30,000 health cash plan customers transferred from Premier Health Benefits (part of WDHCS) to engageMutual Insurance Ltd.