Parents whose adult children move back home after university or a first job are spending an extra £3,246 a year on food, energy and water, according to calculations for the Mail on Sunday by wealth manager Quilter.
Sky-high house prices, rising unemployment and persistent inflation have left hundreds of thousands of young adults with little choice but to return to the family home. One in three 18- to 34-year-olds were living with their parents last year, equivalent to almost five million young people, according to official figures.
Prime Minister Andy Burnham pledged last week to curb the rise in young Neets, those not in education, employment or training, which stands at more than one million. Even graduates who land one of the rare jobs on offer are often working from their childhood bedrooms to save money, as first-time buyers now pay £226,000 for a home on average, according to the website Finder.
The cost of a child moving back
Quilter's figures show the extra £3,246 a year breaks down into £2,421 on food, including groceries, takeaways and meals out, plus higher water and energy bills.
Water bills vary by region, but the number of people in a home affects the cost. The average two-person household spends £832 a year on water, rising to £988 with one extra person, according to Southern Water. Energy bills rise by an extra £669 a year under current Ofgem price cap rates, based on a household moving from medium to high usage when a child returns.
Over time the sums add up: if one child lived at home from age 18 to 34, parents would spend an extra £55,187 in total.
Starting the conversation
Catherine Morgan, a financial coach who hosts the It's Not About The Money podcast, said timing matters when raising the subject. "In an ideal world, you would start having these conversations a good period of time before they actually need to happen, so it's not a surprise," she said. "Park the conversation for the weekend when you're not rushing around and feeling stressed. Money is very emotive, naturally, so you need to make sure you're chilled out over dinner, perhaps."
Morgan said such conversations should be used to assess a child's appetite for moving out and how to get there, including saving for a deposit through products such as cash Isas. Savers can put up to £20,000 a year into a cash Isa, falling to £12,000 from next April for under-65s, and earn interest free of tax.
Those buying a property for less than £450,000 can instead use a Lifetime Isa, which allows first-time buyers to save up to £4,000 a year in cash or investments tax-free, with the Government adding a 25 per cent top-up. A stocks and shares Isa is unlikely to be the best option, since investments should generally be left for at least five years to ride out stock market swings.
Setting a timeline
Nicholas Mendes, of the broker John Charcol, said the most successful cases were not ultimatums. "The most successful cases I see aren't ultimatums, they are a plan the whole family signs up to, usually six to 12 months out," he said. "The plan can break down if parents keep paying for everything indefinitely instead of directing that support towards a deposit or a mortgage structure that moves things forward."
Morgan said children who are already saving may need permission rather than pressure, suggesting phrases such as "You're closer than it feels, shall we put an actual date in to start viewing places?" or "What's stopping us aiming for the spring? You may already have more than you think." Charging rent to a child who is already saving hard could work against them, she said: "If they are already doing the work, adding rent on principle can work against the goal you both share."
Should you charge rent?
For children less keen to move out, rent may provide the push they need. A parent charging £300 a month, against £500 for a room in a shared house, may prompt a child to conclude the extra £200 is worth it for their own space. Parents could go further by charging a working child market-rate rent to encourage them to leave, or by saving some or all of the rent in an account to hand back when the child eventually moves out. Morgan said rent works best paired with a plan: "On its own it can create a resentful tenant."
Gifting a deposit
Parents wanting their child to move out faster, particularly in London or the South East, may choose to dip into their own savings. The average first-time buyer deposit is £63,855, and more than half of first-time buyers were given money by family to get onto the property ladder, according to the estate agency Savills.
A young adult buying a £200,000 home would need a £20,000 deposit at 10 per cent. With £10,000 saved and £300 set aside a month, it would take more than two and a half years to reach that target without help.
David Hollingworth, of the broker L&C Mortgages, said any help usually needs to be a gift rather than a loan. Some lenders are more flexible, he said, but a loan can reduce how much a child can borrow, since lenders factor in the repayments owed to a parent when assessing affordability. Lenders typically require a letter confirming the money is a gift with no rights over the property attached, and that repayment is not expected.
Morgan said she was not a fan of gifted deposits. "The implications of this financial rescuing are that it removes personal accountability," she said. "You want to do the best for them. But gifting the deposit removes the ability to build financial resilience."
Joining the mortgage
Parents can also help by joining a child's mortgage through a joint buyer, sole proprietor (JBSP) arrangement, which lets a parent's income count toward a lender's affordability assessment, though it carries risk.
Buyers can typically borrow around five times their income. On a £300,000 house requiring a £30,000 deposit, a buyer would usually need to earn around £54,000 to borrow the remaining £270,000. A child earning £30,000 alone might borrow only £150,000, but with a parent earning £40,000 added to a JBSP mortgage, that could rise to £350,000.
If the child stops making payments, the parent is liable despite gaining no ownership of the property, making legal advice essential. Mendes said an exit plan should be agreed from day one. "This should never be treated as permanent, but you should factor that liability into your own future borrowing or retirement plans," he said.
'We asked our daughter to pay £50 a week'
Paul O'Brien, 50, and his wife Lorraine, 45, of Uxbridge in west London, have plenty of experience of adult children at home. The family were brought closer by the death of their son Jake, 26, who died last October after a decade-long battle with cancer.
Their youngest child, Lily, 22, lives at home after qualifying as a dental nurse. Their son Adam, 25, is posted abroad with the British Army, while their daughter Ellie, 23, joined the RAF after a degree at the University of Bristol.
Paul, a civil servant, said he didn't hesitate to ask Lily for rent. "Family is everything to us, but we want the children to stand on their own two feet. When I asked Lily to contribute £50 a week for bed and board, she was not happy. Many of her friends do not pay to live at home so she thought it unfair," he said. "We chose £200 a month because it is just enough for her to know that rent and meals are not free. But even though she is only starting on a basic wage of £25,000 a year she still has enough left to go out and enjoy herself and save for the future. She is also no longer grumbling as she understands the cost of living in London."
Lily pays the rent by monthly standing order. "If we go out for a meal as a family there is no question of splitting the bill. They know we are happy to support them. But they need to understand there are bills that must be paid and learn the challenges of budgeting," Paul said. The family said support from the Teenage Cancer Trust and Great Ormond Street Hospital was vital in Jake's fight against lymphoma.
Other readers' experiences
Other readers described similar arrangements. Sam McHugh said her two eldest children moved back home after university; her daughter paid £200 a month while working and saving to live with her partner, while her son, who was on universal credit and not working, paid £120. "You do what you can for your children but without them my food and utility bills were lower," Sam said.
Tracey Suckling said she had both her sons, now 33 and 30, living at home until a couple of years ago, along with her younger son's girlfriend. The youngest and his girlfriend paid £200 a month between them, while her eldest insisted on paying £200 himself as he earned more; both bought and cooked their own food and have since saved enough to buy their own homes. "I couldn't think of anything worse than still living at home in my 30s, and was gone by my late teens," she wrote.
Diane Dingle said that when her son got his first job in 1998, she told him to pay £10 a week for living at home and save £50 a week, raising the savings amount whenever he had a pay rise. "Thanks to this he saved enough for a deposit on a shared ownership house at age 27," she wrote. "Budgeting should be taught at school and parents must help their children."
