Many parents believe that the early years are the most expensive part of parenthood. But research shows that it is the teenage and even adult years that can prove costly for unprepared parents.
The Coming of Wage report, commissioned by Children’s Mutual, reveals that many young people in the UK are unable to support themselves and that a high number of parents is being forced to bail children out.
According to the report, the costs incurred at university, discrepancies between first job salaries and outgoings and first home buying are the largest stumbling blocks for 18- to 25-year-olds.
Four times more teenagers now go to university compared with 30 years ago, and the average student graduates with £12,000 of debt. Meanwhile, house deposits have risen more than 450 per cent over ten years. As a result, the number of first-time buyers in the UK has dropped 20 per cent in the last year, with the average age for first-time buyers reaching 34.
Many parents find themselves using savings and even pension funds to help their adult children get set up and an incredible 95 per cent expect to continue funding their children even after they have left home.
Chief executive of The Children’s Mutual, David White, says that although parents of ‘grown up’ children could be facing financial pressures, those with younger children can act now to avoid the squeeze when the time comes.
“Parents with children aged between five and 13 could still have enough time to stop a potential financial train crash heading towards them - for example by saving on a regular basis over the long term.” He suggests that Child Trust Funds (CTFs ) could be the best way for parents with young children to prepare for the future.
“They have been given the catalyst to help them save. And by engaging now and saving a little, often, they could help to avoid the financial conundrums being faced by the parents of today’s young adults,” he said.
New Government figures published on October 25 revealed that 24 per cent of CTFs are being topped up.
“The figures show that the number of children being saved for over the long-term has increased by a third in just two years - from 18 per cent pre-CTF to 24 per cent today - which is very good news,” said Mr White.
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