Very few things in life are cheap these days, and having children is no exception. While many people may consider the main cost of raising a child to be nappies and clothing, very few people think of the cost they have to bear for their adult children. Looking after a child from birth until the age of 21 can run to a cost of £225,000 – and that depends on whether they continue to need financial support into their twenties. According to a study by Fidelity, many parents still give financial aid to their children well into their late thirties, or even forties.
The cost of living continues to rise; coupled with an unsteady job market and a swathe of zero hours contracts designed to improve unemployment figures this has left many young people unable to survive on their salary alone, meaning that they have to either return home to live with their parents or accept financial support in order to pay their way. The study uncovered that 52% of the parents interviewed were still supporting an adult child, with 12.7% continuing to support two children. 33.4% had children who had moved out but still needed financial assistance; consider this figure against pension performance, this could have serious repercussions for the future. Tradition has it that the younger generations look after their elders, but it seems that this generation is unable to take care of itself, let alone anyone else. The average cost of supporting a child living away from home is £23,059.26, so it’s not surprising that 48.70% of parents in this situation have reported that their savings have taken a hit. Surprisingly, the age group that needs the most support is 30-39 year olds, although this could be because many people are taking more time to study, and are therefore classed as living at home.
People now face not only having to decide whether they can afford to have children, but also whether they can afford to support these children for at least four decades. The retirement age is slowly being pushed back, but parents risk not being able to retire at all if their offspring remain dependent. Both men and women are having to receive financial help from their parents – 52% of men rely on financial support, with women not far behind with 49.8% making withdrawals from the bank of mum and dad. Many young people face becoming lifetime tenants; even the government’s Help To Buy scheme, which allows first time buyers to buy with just a 5% deposit, has failed to help people onto the property ladder. With wages as low as they are, even a small deposit is beyond the reach of many people.
What effect will this have on the birth rate? Will people be able to afford to have children? Whether the generation that are still being bailed out by their parents will be able to help their own offspring in the same way is debatable; one can only hope for a dramatic financial recovery, or else the cost of raising a child may become untenable.