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Kids bail out bank of mum and dad

Posted in: Research Last updated: 02 Dec 2008

A generation of 18 to 24 year olds are stepping in to help fill their parents’ cash shortfall, research from engage Mutual reveals. More than four out of 10 (41%) have helped support their parents financially in the last six months.

Sharing the family financial burden has seen these young adults help meet the costs of rocketing utility bills (78%), and in some cases, supplement parents’ incomes and pensions (7%).

The findings are part of engage Mutual’s 3GB1 research, which explores shifts in traditional financial relationships between the generations. A GB representative sample of more than 2000 people was asked about the financial support given to parents in the past six months.

how much are contributing 18-24 year olds helping their parents?

With average annual energy costs per household at over £1,2002, nearly 8 in 10 (78%) 18-24 year olds are helping with parents’ utility bills – 50% more than last year – with an average £422 donated in the last six months.
As incomes and pensions are losing their value3, 7% contributed an average £200 in the past six months to supplement their parents’ incomes.

other findings:
More than one in ten (13%) of GB adults face the double burden of supporting their own children whilst contributing to their parents’ finances. Of these, 15% have donated an average £1,250 over the past six months to supplement their parents’ incomes and pay towards utility bills (equal to £2,500 per annum).

Karl Elliott, 3GB spokesperson for engage Mutual Assurance said:

“As financial pressures grow, family generations are increasingly turning to each other for support in making ends meet. Our research has shown that many young Britons are sharing the burden.”

“With tougher times ahead, it is important that families plan for their future. We believe that by working with our customers to provide products and services that are straight forward and good value, we can make it easier for families to better manage their finances.”

footnotes
1. 3GB is engage Mutual’s Three Generation Britain research index. Research was conducted by YouGov across a GB representative of 2,019 between August 29th – September 1st, 2008.

2. The Guardian, 6 August 2008http://www.guardian.co.uk/business/2008/aug/06/oilandgascompanies.taxandspending

3. Institute for Fiscal Studies 9 October 2008 http://www.ifs.org.uk/press.php?publication_id=4329

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.