If you’re a parent wondering if your grown-up child will ever manage to fly the nest, you’re not alone. Adult children living at home can have serious implications for family finances – and getting everyone to contribute and share the financial burden can lead to family rows and upset.

Adult children living at home ‘increase spending’

Having an open discussion about money, bills and rent as a family is important
Having an open discussion about money, bills and rent as a family is important

It’s estimated more than a quarter of 20 to 34-year-olds in the UK still live with their parents – with men being more likely to do so than women. There may be all sorts of reasons for this – perhaps a relationship has broken down, renting is too costly or they’re trying to raise a deposit for a home of their own.

And while it may be great to be living as one big happy family, new research on adult children living at home sheds light on the financial pressures the ‘boomerang’ generation of young adults is putting on their parents.

Seven in 10 (72%) of parents of boomerang children say their household spending has increased – although less than half (41%) charge any form of ‘rent’ for their kids to live back at home.

The research, from Skipton Building Society, found finishing university and reaching 30 were often trigger points for moving back in with parents. Some were using the family home as a base to search for jobs, and others were nursing a broken heart following a relationship breakdown.

Parents take just £123 in monthly contributions

Among parents who were taking contributions from their adult children for household running costs, the average amount was the fairly modest sum of £123 per month.

While some parents spent the extra cash on food and groceries, others were sensibly putting the money away for a rainy day.

Adult children living at home need to help out with chores, bills and rent
Adult children living at home need to help out with chores, bills and rent.

Jacqui Bateson, customer proposition manager at Skipton Building Society, says: “Whether you’re 21, 41 or 61, saving for the future is just as important. Having the kids return to the nest is a good opportunity to have a broader conversation about money – we actually found that many parents tend to charge their children rent primarily to help them become more familiar with money management.

“It could also be a good time to revisit your own finances and think about how  you’re saving for yourself, as well as being there for your children when they need you.”

Becky Wiggins, parent blogger @EnglishMum, reckons a positive approach is the right way to achieve financial harmony when it comes to family finances. She says there are eight important steps family need to take to keep on top of issues such as household expenditure and rent:

8 tips for adult children living at home

  1. See your child’s return home as a positive. In this financial climate, it’s something that a lot of young people have to do, so there’s really no stigma attached.
  2. Whether they’re job hunting or starting their first job, your boomerang kid may already be saddled with quite a large amount of debt. Be empathetic to their situation and acknowledge how they’re feeling.
  3. Being completely open about money suits everyone best. If the kids are worried about money, it’s easiest to get everything written down and chat about a plan for managing the debt.
  4. Agree a contribution figure that suits everyone. Skipton found that the average boomerang kid increases household outgoings by £86 a month, or £1,032 a year, so it makes sense that they contribute to the household purse. Regular payments are also good practice for managing bills when they finally move out into their own place.
  5. Money aside, there could also be other ways you and your child could help each other. Maybe they could look after the house or pets while you’re away, or you could give them lifts to job interviews.
  6. If you’re already in a great financial situation, you could consider having your child home as a great way to help them build up a cash pot, such as a deposit for a house.
  7. Don’t feel bad for asking. Now you’re all adults, they understand that you have your own finances to think about and that it’s unrealistic for you to provide everything for them.
  8. Don’t ignore your own finances. Having adult children is a big step for you too. It’s a great time to have a look at your own finances, and take stock of savings, pensions, the mortgage and plans for retirement. You could move to somewhere cheaper – and no longer have to worry about buying near particular schools.

How to handle adult children at home

The reality is, howver, that not many young adults – or their parents for that matter – expected they’d still be living in the family home well into their 20s and 30s.

With nearly a million more 20-34-year-olds across the UK living with their parents compared to two decades ago, there are plenty of reasons why according analysis from think-tank Civitas recently found. Some may have never moved out, while others may have ‘boomeranged’ back after university or a relationship break-up a little later on, or in order to save for their own home rather than pay high rents.

But while finances – and the chance to save – are often a key reason for adult children living at home, it’s still important to be upfront and open about expectations and ground rules on the money front too. This can protect and benefit both parents and adult children, and help avoid any conflict flaring up when it comes to paying for bills or being responsible for costs such as shopping or home maintenance.

Are you a boomerang child living back at home – or the parent of one? Here are some tips for both generations on navigating the money issues…

Family finance tips for adult children

Sit down as a family to work through money and agree a sensible contribution.
Sit down as a family to work through money and agree a sensible contribution.

1. Be open about your finances

ome young adults may have moved back home to give themselves ‘breathing space’ to get their finances back on track. But research suggests parents are often left in the dark. Charter Savings Bank found that while nearly 70% of parents say they’re are open about their finances with their children, nearly half (45%) of 20-34-year-olds have either debts, savings accounts, or both, which their parents are unaware of.

While it may be tempting to keep debts secret, living at home can be an opportunity to work with your parents to clear debts. Being open and honest could also help to avoid rows when parents ask for cash towards household bills.

2. Look for innovative mortgage deals

If the goal is to buy a place of your own, there may be some innovative mortgage deals which could help. In some encouraging news for aspiring first-time buyers, mortgage lending figures from UK Finance have shown that, across the UK, more people got on the property ladder in 2018 than in any other year since 2006.

There is strong competition among mortgage lenders to attract first-time buyers. Research carried out by Moneyfacts.co.uk in early February found that people with a 5% deposit looking for a two-year fixed mortgage rate will find the typical rate on the market has seen a significant 0.54% fall since last August – from 3.95% to 3.41%.

In January, Lloyds Bank launched a new deal to help first-time buyers get onto the property ladder without them needing to put down a deposit – as parents put money into a savings account instead. A similar mortgage deal is offered by Barclays.

3. Save spare money into ISAs and other savings accounts

Government-backed schemes, such as the Help to Buy ISA, were a great way to save. For every £200 you save, you can receive a bonus of £50 (maximum bonus amount is £3,000). Bear in mind that the Help to Buy ISA finished in November, so look for other ways to save. Our guide to Help to Buy alternatives lists six ways you can save for your first home of other big purchase such as a wedding or car.

You also don’t need to keep your savings in one place – and it pays to shop around to make sure you’re getting the best deal for your savings. Read the Wise Living guide to ISA transfers and why you should review your savings regularly.

Tips for parents

Parents need to look at the contribution kids need to make
Parents need to look at the contribution kids need to make when then return home from university or move back in.

1. Agree contributions older children living at home need to pay

Nearly half (47%) of parents don’t charge their adult children rent for living with them, and for those who do, the average is just £161 a month, according to Charter Savings Bank’s research. Some parents ask for contributions towards food (31%), energy bills (23%), phone and broadband (17%), for example, but a third (33%) don’t ask for contributions at all.

Try to agree a fair amount for adult children to contribute to the running of the house, bearing in mind some may also be struggling with debts to pay off, and unpredictable incomes if they’re just starting their career.

2. Set the ground rules when offering financial help to children

Is it a loan, or is it a gift? If you’re expecting to get your money back some day, be precise about how and when you expect this to happen, to avoid rows and misunderstandings.

3. Don’t forget about your finances

It’s natural to want to give your children a helping hand, but don’t neglect your own finances. Make sure your plans for retirement and paying off the mortgage, for example, are on track.

Remember, too, that if you’re a couple such as civil or married partnership with adult children living at home that you don’t take the eye off the ball when it comes to your finances, either. Read the Wise Living guide to how couples can be open with each other when talking about spending and finances.

Free retirement guidance for over-50s is available from the Pension Wise service. And the Department for Work and Pensions (DWP) has just launched a new ‘mid-life MOT’ website, with help and guidance for people taking stock of their pensions, careers and health.