The price of parenthood: The cost of raising a child to 30

27 August 2024

4 minutes

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Parents are facing new financial pressures as they continue to support their children past education and well into their 20s and 30s.

The information on this page should not be considered as financial advice. If you are unsure what’s right for you, please make sure you speak to a financial adviser.

Parents are facing new financial pressures as they continue to support their children past education and well into their 20s and 30s. Limited housing options, the cost-of-living crisis, and a lack of employment opportunities are just some of the factors that have the potential to prevent adult children from moving out to live independent lives.

According to the 2021 Census^[1], around 4.9 million adult children are living with their parents – a 14.7% increase since the previous 2011 Census. Not only does this do little to stimulate the housing market, but it also adds to the financial strain on parents.

The Wealth and Wellbeing Report from LV= (Edition 14) uncovered that 22% of people surveyed^[2]said they would help their children or grandchildren financially with money from equity release.

LV= has since investigated how much money could be needed to raise a child until the age of 30, besides standard living costs, and identified some of the major expenses parents may be required to cover for their adult children. A great way of providing a financial safety net to protect your loved ones is to secure family life insurance. Factoring in the key considerations outlined in this article can help you accurately calculate your required cover amount.

The following estimated additional costs are based on young adults between the ages of 19 and 30.

Mortgage Contributions^[3]

One of the key factors behind adult children living at home is the prohibitive cost of buying their own property. The average price of a house in the UK in July 2024 is £265,600 which is beyond the reach of many young adults. Of all the major UK cities, people in Aberdeen can expect to pay the least on average for a property (£137,300), while those in London (£536,500) pay the most. The prestigious university cities of Cambridge (£468,000) and Oxford (£449,900) are the next most expensive, while property in Cardiff (£255,600) and Belfast (£175,200) are more affordable.

As a result, parents may contribute towards a deposit or pay a chunk of the mortgage premiums to help their children get onto the property ladder. Without this financial support, adult children may be unable to afford a place of their own and continue living at their parents’ home until even later in life.

Education fees

According to recent studies, 71% of parents contribute to their children's university costs. With many university and college courses running into thousands of pounds, students often rely on handouts from their parents to pay for their education, accommodation, and other living expenses while they study^[4].

According to the Student Loans Company, university students in England graduate with an average debt of £44,940^[5].

Wedding costs

The average cost of a UK wedding has surpassed £20,000^[6] for the very first time, and many parents find themselves making a significant contribution towards this cost to help their children tie the knot.

With the cost of the average wedding, honeymoon, and rings standing at almost £26,000, even budget focused couples may struggle to find this cash at a time when they may also be saving to buy a property of their own.

Grandchild support

By the time people reach their 30s, they may have children and many rely on their parents to help out financially. For example, it costs over £7,000 per year on average^[7] just for one part-time nursery place and even more in areas like London and South East England, with grandparents contributing towards these vital expenses while parents go back to work.

Many younger parents have difficulty finding this money on top of other significant living expenses, mortgage payments, and loans, forcing them to turn to their parents for help. Especially with the current average annual salary of someone aged 18-29 ranging between £24,440 and £32,292^[8].

Learning to Drive and First Car purchase

The average price of a new car in the UK stands at £40,000^[9] which is beyond the reach of many young adults in their 20s. Therefore, young people are relying on help from their parents so they can afford a car to drive to work and get around.

As parents continue to support their children financially until much later in life, it may be affecting their ability to plan for retirement. The 14th edition of the LV= Wealth & Wellbeing Report found that 71%^[2] of people aged 35 to 54 don’t know how they’ll avoid running out of money in retirement, while 60% of adults over 50 think they’ll struggle in retirement.

Gary Beyer, Protection Proposition Director at LV=, said: “Raising a child is getting more expensive, and many families are feeling the strain as the cost of living rises."

“This is especially true when children are young, with child care costs continuing to increase. However, the trend of helping children financially also continues into adulthood with parents contributing towards mortgage costs, education fees, wedding costs, first car purchases, and other major expenses.”

He added: “An unexpected event like an illness or accident can significantly impact your family’s finances and that’s why it’s important for parents to have a plan to protect against a sudden loss of income, such as considering income protection or critical illness insurance.”

Notes to editors

About LV=

LV= is one of the leading life and pensions mutual insurers, serving over 1 million members and customers across the UK. As an investment, retirement and protection specialist, LV= offers a range of products, services and advice to help members and customers protect their income while they’re working and maximise it when they stop.

About our research

The Wealth and Wellbeing Research Programme was developed by LV=. Each quarter, it draws on public data (where indicated) and independent research conducted by Opinium Research among 4,000 UK adults. All figures quoted are for September 2023 unless otherwise stated. Population estimates based on UK adult population of 53.2m. While care is taken in the compilation of the report, no representation or assurances are made as to its accuracy or completeness.