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Parents fork out £233 billion

Press release: 01/09/2008


  • An 'adult child' costs their parents £21,540 on average.

  • Over half of parents (55%) assist adult children with the cost of living, not just with one-off contributions such as weddings.

  • 2.3m 'grandparent' households are financially contributing towards two generations – their children and their grandchildren.

  • 46% of over 70s are still supporting their children financially, despite generally being retired.

  • Less than one third (29%) of today's parents received financial support from their parents after they left school.

New research from insurance, pensions and investments group LV= reveals that parents spend a staggering £233 billion (1) on supporting their adult children (2), and are foregoing their own financial freedom to support their children.

The study, which was carried out amongst adults aged 40 years and over who have children 18 years and over, found that nine out of ten parents (94%) continue to contribute financially towards education and other major purchases such as houses and cars, plus living expenses, once their children have reached ‘adulthood'.

Over half of all parents surveyed (55%) admitted to helping their adult children with general living costs, indicating that the ‘credit crunch' and rising living costs are impacting on the finances of adult children.

Nigel Snell, Communications Director at LV=, said: "Parents certainly like to financially contribute, if they can, towards large purchases for their adult children, such as weddings and deposits for first homes. However, it seems that the current economic climate is impacting on day to day finances too. Parents are the hardest hit, with a large proportion admitting that they are helping to cover their children's living expenses, as well as meeting their own financial commitments."

Parental contributions

Overall parents contribute £21,540 (3) to their children after they have reached 'adulthood', in the following areas:

What parents financially helped with

What they spend on average

First Home

£5,602
63% of parents have contributed more than £3,000 towards their adult child's first home, with 31% contributing more than £9,000.

Savings and Investments

£3,340
64% have contributed more than £1,000 towards their adult children's savings and investments, with 22% donating more than £5,000.

First Car

£1,702
42% of parents contribute more than £1,000 to the cost of their child's first car, with 15% of parents contributing more than £3,000.

Wedding

£3,111
19% contributed more than £5,000 towards their child's wedding.

University Fees

£2,245 per year, totalling £6,735 (based on a three year degree course)
21% of parents spend more than £3,000 a year on their child's university fees.

Total

£21,540*

* This does not include contributions towards general living costs, which 55% of parents admitted to helping their adult children with or other costs that may contribute towards.

Not yet 'flown the nest'

One quarter (23%) of parents aged between 40 and 49 years still have children aged over 25 years old living with them, indicating that despite falling house prices, adult children are not in a hurry to leave the nest, and may not be able to afford to either.

Supporting two generations

According to the research, it is not just their own children that parents are forking out for. Of those parents who have grandchildren too eight out of ten (79%) find themselves supporting both their own children and their grandchildren. This equates to 2.3m 'grandparent' households (4).
Nearly half (47%) of those who contribute towards their grandchildren help out with money towards savings and investments, while one third (34%) help out with the cost of travelling.

Financial support into retirement

Almost half of all parents aged 70 years or older (45%) are still helping their children financially. Despite generally being retired and living on a reduced income, 55% of these parents state that they help their children because they feel it is their responsibility as a parent, and 42% state that they support their children ‘because they can afford to'.

Today's children are for life

In contrast to the pattern of behaviour today, less than one third (29%) of the parents questioned said that they had received financial help from their own parents after they had left school. Today, almost two-thirds of parents (62%) say they help their adult children because ‘they need the assistance' and 17% of parents say that their adult child actually asks them for financial support.

Nigel Snell concluded: "Our study shows that parents can no longer expect their children to pay their own way once they have flown the nest. More than ever it's true to say that having children means signing up to a lifetime financial commitment.

"Many parents will have had to put some plans on hold to manage the costs associated with raising a family, and once their children are old enough, parents should begin to encourage their own children to make small provisions, so that the financial burden can be reduced and parents can enjoy more financial freedom in retirement."



All figures, unless otherwise stated, are from YouGov Research. Total sample size was 1,184 adults 40 years old and above with at least one child aged 18 years or over. Fieldwork was undertaken between 5th – 6th June 2008.

1. There are 30,076,000 people aged 40 years old or over in the UK (Source: Government Actuary's Department population projection, 2008). 54% of adults of 40 have at least one child over the age of 18 years (estimation by LV=, based on BMRB data). This gives a population of 16,241,040. This equates to 5.44m one family households and 5.36m one person households in the UK, aged over 40 years old with at least child over the age of 18 years (estimation by LV=, based on ONS Social Trends 38 data). Therefore, there are 10.8m households in total. Parents pay £21,540 on average towards the cost of a first home deposit, savings and investments, first car, wedding, university fees and travelling. £21,540 multiplied by the total number of households (10.8m) comes to £233bn.

2. ‘Adult children' are defined as children aged 18 years or over.

3. The cost of an adult child has been calculated based on the average costs of contributions to the first home, savings and investments, first car, wedding, university fees and travelling.

4. The research indicates that 27% of parents who have grandchildren contribute towards them financially. Based on 10.8m households (estimation by LV=, based on ONS Social Trends 38 data) in total, this equates to 2.9m households. Of those parents who contribute towards their grandchildren, 79% also financially contribute towards their own children, equating to 2.3m households.


LV= and LV= Liverpool Victoria are trademarks of Liverpool Victoria Friendly Society Limited and LV= and LV= Liverpool Victoria are trading styles of the Liverpool Victoria group of companies. The new LV= brand identity was launched in March 2007.

LV= employs around 2,500 people, serves more than 2.5 million customers and members, and manages around £8 billion on their behalf. We are also the UK's largest friendly society (Association of Friendly Societies Yearbook 2006/2007, total net assets) and a leading mutual financial services provider.

Liverpool Victoria Friendly Society Limited (LVFS) is authorised and regulated by the Financial Services Authority and entered on the Financial Services Authority Register, No. 110035. LVFS is a member of the ABI, AFS and ILAG. Registered address: County Gates, Bournemouth, BH1 2NF.