Parents can face struggle if over-18s still at home

‘CLIFF-EDGE’ LOSS OF BENEFITS A CAUSE OF FINANCIAL DIFFICULTIES

PARENTS on low to middle incomes are struggling to support adult children who cannot afford to move out of the family home, new research has found.

While better-off parents can provide support and be the bank of mum and dad, those with limited means are less able to help.

They can struggle to make ends meet, especially as a result of sharp reductions in support from the state when their children are 18.

Two-thirds of single people aged 20 to 34 who do not have children live with their parents, totalling over 3.5 million young adults.

Researchers at Loughborough

University, funded by Abrdn Financial Fairness Trust found the high cost of alternative housing, difficulty finding stable work, and insecure, low income meant many young adults feel they have no option but to live with their parents. The pandemic has exacerbated issues.

Families on low incomes can lose between £300 and £680 a month in universal credit and child benefit when a child leaves secondary education or training.

Parents can find this sudden loss tough to deal with and be caught out by the income shock they will face.

The benefits system assumes young people will start contributing to household finances, but often they have limited means to do so.

Researchers found living with parents could provide a safety net and emotional support for young adults.

Parents could value having their children around, but lack of space and difficult relationships could cause tension.

The academics recommended extending entitlement to the universal credit work allowance to any family with at least one child under 23 living in their home.

They said this would ease the most severe cliff edge caused by loss of this allowance when a working family no longer has dependent children and help support the family for a transitional period. This would benefit up to 22,000 families.

In addition, rent support through housing benefit or universal credit to parents with young adults living with them should not be reduced in cases where the young adult does not earn.

A dedicated support/advice service should provide a website and/ or other resources bringing together information and advice for both young adults and their parents who live together.

Katherine Hill, lead researcher, said: “Young adults want to contribute, but for families in the most difficult circumstances, the expectation that they cover a shortfall in parents rent takes a sizeable chunk of their income if they are not working.

“This deduction should be aligned with the support young adults, and their parents, receive.”

Mubin Haq, chief executive at Abrdn Financial Fairness Trust, said: “The current system is failing our next generation.

“Government policy needs to be urgently changed to provide better support for families on lower incomes where adult children live at home.”