A significant portion of parents are concerned about their ability to retire on schedule due to the ongoing financial responsibility for their adult children. New data indicates that nearly half of parents anticipate delaying their retirement plans to continue providing financial support to their children, who are often remaining in the family home or relying on parental assistance well into their twenties.
This trend contrasts with previous generations, where parents typically moved out of their homes between the ages of 18 and 21. Current estimates suggest parents expect their children to leave home around age 26. This shift is attributed to factors such as increased housing costs and persistent inflation impacting younger generations.
Research from investment platform XTB, which polled 2,000 parents with children under 18, found that almost a quarter feel unprepared for the financial demands of supporting their children into adulthood. Additionally, 51 percent of parents expressed worry about their capacity to fund their child's university education or living expenses should they attend.
Despite these concerns, four out of five parents are actively saving for their children, intending to help with future expenses like purchasing a first home or supporting significant life events such as weddings.
Kathleen Brooks, research director at XTB, noted that supporting children into adulthood is evolving into a more substantial, long-term financial commitment. She emphasized the importance of early and consistent savings to alleviate parental pressure. Brooks suggested that even modest, regular contributions over an extended period can make a substantial difference in preparing families for future milestones.
University Costs Projected to Rise Sharply
Analysts project that the cost of a three-year university degree in the UK could surpass £91,000 by 2040, a considerable increase from current annual costs of approximately £23,000. For students in London, the total expense could approach £119,000 annually. The study identified key reasons parents feel underprepared, including the difficulty of saving due to everyday living costs (64 percent), the perceived high future expenses (40 percent), and the need to plan for multiple children (39 percent).
Approximately 42 percent of parents regularly set aside money for their children, while 33 percent do so occasionally, and 5 percent have made a one-off deposit. Nearly half of parents (49 percent) have saved less than £5,000 for their child's transition to adulthood. The average savings for a child heading to university currently stands at £5,508. The primary financial goals for parents include contributing to accommodation costs (47 percent), tuition fees (41 percent), and daily living expenses (33 percent).
Eighty-two percent of parents agreed that supporting children into adulthood has become a longer-term financial undertaking compared to previous generations. Data indicates that parents most commonly save through children's savings accounts (39 percent), Junior cash ISAs (24 percent), and general savings accounts (22 percent).
Brooks also advised parents to consider how their savings are working for them over time. She stated that earlier financial planning offers greater opportunities to build a foundation that can support children through major life events, such as university, homeownership, or other significant steps into adulthood. Developing a financial plan early can provide enhanced flexibility when these milestones arrive.