Without rent, food magically appears in the refrigerator and laundry is done on demand – it’s no wonder some adult children decide to stay in the family home.
But in an alarming trend, more young adults feel they have no choice but to live in the family home because the costs of moving are too high.
Rising rent, food and energy costs (not to mention house prices) have made it increasingly difficult to save for a deposit.
A staggering 3.6 million people aged 18 to 34 still live at home. According to official data, this represents 28 percent of people of that age.
Adult men are much more likely to share a roof with their parents: a third of all men under 34 live at home, compared to around a fifth of women.
Family ties: A staggering 3.6 million people between the ages of 18 and 34 still live at home. That is 28% of people within the age range, according to official data
It means millions of parents are living with a greater financial burden for longer as they shoulder the additional costs. It can be difficult to start demanding rent after decades of having them under your roof, especially if they’re camping out in your childhood bedroom.
But how much extra does it really cost to have them at home? How much is fair rent and what’s the best way to help them fend for themselves?
Money Mail crunches the numbers and asks professional financial planners the vital questions.
Calculations for Money Mail by Evelyn Partners investment group Bestinvest have found that, on average, parents fork out an extra £3,684 each year (£307 a month) on energy, food and water bills when an adult child lives in home.
That means an extra cost of £62,628 if your child stays under your roof from age 18 to 34. This rises to £6,252 a year for two adult children living at home (£521 a month).
Alice Haine, personal finance analyst at Bestinvest, says: “Naturally, many parents would welcome the return of their adult children, but they may change their mind when they see their beloved children chewing on the kitchen cupboards, enjoying long hot showers . and pile the clothes in the washing machine.’
Food is the biggest expense. The average monthly food budget for two adults in the UK is £415, according to analysis of official figures by data group NimbleFins.
This includes £320 spent on groceries and £95 on takeaways and eating out. However, for three adults this rises to £622 per month – £480 on groceries and £142 on ready-made food. That’s an extra £207 a month.
You will also have to deal with higher energy costs. The average annual energy bill is currently £1,690, or £141 a month, according to Ofgem Energy Price Cap.
It is a medium-sized home with two or three occupants. However, if one or two adult children return to the family home, the cost can rise to £2,365 a year, or £197 a month. That’s an increase of £56 a month.
Without rent, food magically appears in the refrigerator and washing is done on demand – it’s no wonder some adult children decide to stay in the family home.
While water bills may differ by region, the number of people living in a home can also have an impact.
The average monthly bill for a two-person household is £34, according to major water supplier Southern Water. Add an extra occupant and that rises to £44, or £51 for two extra people.
In reality, the total cost of having your children at home could be much higher, says Ms. Haine: “After all, if someone is part of your daily life, a parent may feel inclined to make ad hoc purchases and buy gifts for your children”. .
“While tapping into the Bank of Mom and Dad by taking advantage of free accommodation may be financially beneficial for the adult child, it may have a detrimental impact on their parent’s budget and their future savings and investments.”
Parents whose children have left home don’t really expect them to return, so they may not have budgeted for the additional costs.
Charging an adult child for rent, or a contribution toward bills, can generally be a good idea, Haine says. But how much?
A survey carried out by Comparethemarket last summer found that more than half of parents charged their children some form of rent to live at home after the age of 18. But rather than actually paying their fair share, the payment is more of a symbolic gesture.
On average, they were paid just £25.55 per week, which equates to £110.71 per month.
This is much lower than the average UK rent, which is £1,223 a month, after rising 7.2 per cent in the last year, according to property website Zoopla. The highest average rent in the UK is in London, where landlords charge £2,121 a month, while the North East has the lowest monthly rent, £695.
It was found that parents shell out an extra average of £3,684 each year on energy, food and water bills when an adult child lives at home.
While you could technically charge the going rent in your area, that may not be wise as it could hinder your child’s ability to save and ultimately move.
Mrs Haine says: “A rent that covers only the financial burden of having an extra person in the house should not be so onerous as to delay your ability to save, move and live independently.”
You can calculate the added cost yourself by monitoring any increases in your bills and weekly shopping costs.
Alternatively, you can charge £307 a month, which Haine says should cover extras for energy, food and water.
A property is considered “affordable” if you spend 30 per cent or less of your income on rent, according to the Office for National Statistics. This means that charging your adult children 15 percent of your income would give them the financial room to save, Haine says.
As a general rule, you shouldn’t charge anywhere near the average rent in your area, but you should ask them to cover basic costs at a minimum,” he adds.
But if parents want to accelerate their children’s savings journey, then it would be more preferable to charge 10 percent of their children’s income, as long as it is enough to cover the costs to the parents of having the child at home, he adds.
They may not be charged anything at all, but adults who have received significant financial help from the Bank of Mom and Dad are more likely to continue living at home with their parents, according to a survey by investment group Wealthify.
Clingy children: Adult men are much more likely to share a roof with their fathers: a third of all men under 34 live at home, compared to around a fifth of women.
They are also more likely to make impulsive purchases and avoid checking their bank balance, and additional financial support generally makes them less resourceful with their own money. They are also less likely to have an emergency savings fund.
Michelle Holgate, a financial planner at wealth manager RBC Brewin Dolphin, says getting adult children to pay some bills can be helpful if they hope to buy a home. “Putting letters in your name will improve your credit score and could improve your chances of getting a mortgage,” she says.
However, you have to evaluate their financial situation before asking them to contribute large amounts, he adds. For example, consider if they are in debt and need to prioritize payments.
Neil Rayner, head of advice at financial adviser True Potential, says parents could save their children’s rent payments to put towards a house deposit.
“Investing £450 a month in stocks and shares Isa yielding 6 per cent a year would mean they could have £31,553 in just five years – enough for a deposit on the average house,” he says. “This is a win-win as it would allow their children to get on the property ladder.”
If your child earns more, you may be tempted to charge them more in rent. But Haines warns against this, especially if you have multiple children.
She says: ‘You should always treat your children equally and charge an affordable amount. Don’t penalize one of them if he makes more money by asking for more rent. Charge them enough to cover the bills, but not so much that it affects their savings prospects.’
- Does your adult child still live at home? Tell us how much you charge, at j.beard@dailymail.co.uk
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