IS YOUR LOW-PAID JOB SHRINKING YOUR PARENTS’ PENSION POT?
The average parents of today’s young adults are shelling out £15,490 per ‘child’, as their offspring continue to need financial help well into their twenties. One in three parents admits they are currently forfeiting long-term financial planning for the sake of their children’s immediate needs.
New research — conducted by savings and investments company Standard Life — found that parents are currently supporting their over-18s with expenses such as university costs, debts, plus help with wedding costs, a flat deposit and other general living costs, as their young adult children struggle to make ends meet thanks to high unemployment, low-paying jobs and the soaring cost of living, including sky-high rent.
And researchers pointed out that the true scale of their parents’ sacrifice is even greater than £15,000. If that sum was invested into a pension pot it would be worth far more to their parents in the future. In 20 years’ time it would amount to £38,500 for a basic rate taxpayer, or £15,380 for a higher rate taxpayer. This means that a higher rate taxpayer with two children could be foregoing £100,000 from their pension pot in order to tide over their grown-up children now.
Standard Life’s spokesperson John Lawson said:
“A parent’s desire to provide for their children even when they become young adults is increasingly coming at a huge cost to their own future financial security. Our research highlights the significant financial challenges facing parents, whether to secure their long term future or meet their family’s immediate needs.
“The high level of unemployment among young people can only be exacerbating the problem. There’s no doubt that many more adult children will be relying on their parents for support which must be a real worry for many parents. Some may even be returning to the nest as they are made redundant or fail to find work.”
The question of how ‘adult’ graduates feel has been raised several times in recent weeks on Graduate Fog. These new figures appear to show that those of you who still don’t feel truly independent have a good point.
Much of the government’s plans for tackling graduate unemployment seem to involve keeping you financially dependent — whether that’s your parents or the state — for hand-outs. But that’s just not good enough.
This government must do much, much more to help young people find proper jobs that pay wages you can actually live on, rather than herding you into low-paid apprenticeships, unpaid internships and work experience schemes. For your sanity — as well as your parents’ bank balance — you need to be earning your own money so that you can pay your own way.
*DO YOU TAKE HAND-OUTS FROM YOUR PARENTS?
What is the money for – and why can’t can’t you pay those costs yourself? How does it make you feel when you’re forced to ask your parents for money?