It's common for kids to move back home when they simply can't afford hefty house prices. But what do you do when it becomes more permanent and drains your funds? Hargreaves Lansdown's Sarah Coles explains.
Around a third of men aged 20-34 and 20% of women of the same age are still living with their parents, according to the Office for National Statistics (ONS).
Unfortunately, the amount of young people occupying their childhood bedrooms has grown: 40% of 15-34-year-olds live with their parents (up from 36% in 1996).
It’s easy to see why cash-strapped 20-somethings aren’t always keen to embark on an expensive and uncomfortable part of life.
It’s also easy to see who so many parents might prefer to have them at home – at least for a few years.
But if your adult children don’t have any plans to move out, keeping a roof over their heads indefinitely may cause long-term financial problems.
That’s not to say anyone expects parents to unceremoniously kick their children out.
It’s increasingly difficult for young people to kick-start an independent adult life.
Saddled with student debts, facing relatively low salaries (or unable to find work), and the prospect of spending 27% of their income on rent (49% in London according to ONS data) – it’s unsurprising they may stay put.
Unfortunately for their parents, this doesn’t come cheap. Keeping a roof over your children’s heads, feeding them and keeping them in the manner to which they’ve become accustomed is an expensive business.
If your adult child isn’t working, and spends the day with the heating on, raiding the fridge and enjoying endless electronic gadgets, it’s going to push your bills up.
These aren't the only costs to consider.
When your children are home, you may want to include them on days and meals out, or even holidays, bumping up your expenses even further.
It’s important for parents to focus on their own financial needs, but this may not happen until the house is empty.
It’s often at this point they may plough extra money into building their savings, investments and pensions, and working to make sure the mortgage is paid off.
If the kids are still at home for another decade, you may miss this opportunity and either face a poorer retirement or a delayed one.
There’s a delicate balance to be struck between providing help your children need and offering so much help that your children never stop leaning on you.
The best approach is a three-pronged attack.
Set the ground rules
The first ‘prong’ is to make it clear that when they live at home after the age of 18, they’re doing so as an adult rather than a child.
So, this means your child is living as a housemate with responsibilities.
This means they need to pull their weight when it comes to chores and do their fair share of cooking and cleaning.
These adult responsibilities extend to work outside the home too.
It’s not always easy to find work, but it needs to be clear that their first job is to get a job, and they need to put time and effort in.
Unfortunately, this can cause an enormous amount of stress between parents and their adult offspring, so setting this as a ground rule will help.
Charge for rent
The second ‘prong’ is to charge rent. You may want to offer them an initial grace period, during which they are able to find work.
Some parents will start with a nominal rent – perhaps to cover their share of the bills.
After a certain period of time, you can then increase it to the kind of sums they’d pay for a room in a shared house elsewhere.
This will help your child start to manage their budget so that when they make the move away from home, they are used to living on less.
It may also lessen the attractions of living at home, compared with living elsewhere where the bills are no higher, and they have far more freedom.
You’ll need to have a strategy if your child fails to pay rent. You should be prepared to be flexible if it doesn’t happen often but need to be careful this doesn’t turn into a monthly occurrence.
So, you may agree they provide payment in kind through taking on more of the household chores for any month when they can’t pay their rent.
If this becomes a regular problem, you may consider withdrawing services such as blocking the Wi-Fi or stopping subscription media services to devices they have access to.
This is likely to be a painful process, but it’s vital that there are consequences.
Offer financial support
The third 'prong' is to offer them financial support when they actually move out.
Some parents will need to spend their offspring’s rent money, but others may put it into a savings account to create a nest egg.
One sensible solution is to use a portion of it for household expenses and save the rest for your child.
You can then agree to spend this helping your child with the cost of moving out by helping to pay for the security deposit and the first month’s rent.
Alternatively, you can agree to pay a monthly allowance for a period, while your child finds work locally.
This is only sensible if your child is showing enthusiasm for taking responsibility for themselves.
If they tend to feel they can always rely on you to bail them out, it may be very difficult to stop an allowance.
Even if you trust your child not to abuse the situation, you need to be clear how long you are prepared to subsidise their lifestyle and give them plenty of notice before their allowance stops.
This third prong tends to work best if your offspring knows nothing about your plans, or they may feel less inclined to pay rent as it’s “their money” anyway.
But if all else fails, you can offer the third prong of financial support as an incentive to get stuck into the first two.
When your child doesn’t play ball
From the day your child moves back home, it's worthwhile discussing a time frame.
If you’re upfront from the start, they know exactly how long they have before they’re expected to be financially independent.
So, there’s less risk they fall into bad habits and let things drag on for years.
If they’re already living at home, you can introduce a time frame step-by-step.
This can start with the period in which they’re expected to find work, then a certain time until they start paying rent.
You can also add a date at which the rent becomes aligned with the market, and then a period by which you expect them to find a place of their own.
Anyone who has gone through a prolonged version of this process knows just how hard it can be.
There can be battles and prevarication at every stage from a grown-up child who can’t see why they should take anything other than their ideal job, or why they need to pay rent to a parent that probably earns more than they do.
Parent and child can become locked in arguments in which nobody is prepared to back down, which will eventually start to damage their relationship.
In these circumstances, before you do anything, check that your own expectations are reasonable.
Non-financial ways to help
Consider what you expect from your child, and whether it’s realistic. Then sit down with your child and ask why they don’t want to move out.
You can go through these reasons together.
If, for example, they say they’re looking for work but can’t find anything, work with them to ensure they are actually applying for jobs and offer help in polishing their applications.
You can also ask them whether they would rather volunteer to fill any gaps in their CV or take any paying work they can get while they go through the application process.
Likewise, if they say they can’t afford to pay rent, talk to them about their expectations, and about the years we all spend in shared houses in less attractive parts of town.
You can go together to see lettings agents and get an understanding of what they can get with the rent they can afford.
If they say they are saving to buy a property or to pay for more studies, then you may be prepared to let them stay at home, but talk about how much they’re saving, and where.
If they want to buy a house, for example, they can put £4,000 into a Lifetime ISA and get £1,000 free from the Government every year.
The thought of all this potential conflict can be incredibly off putting. It’s one reason why so many parents can’t face the stress of asking their adult offspring to leave, and just let them stay for years – or even decades.
But this isn’t exactly a conflict-free solution either, as anyone who has lived with their adult offspring will attest.
Yet this conflict may help your adult offspring thrive on their own two feet and enable you to prepare properly for retirement.
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