Soaring bills push young adults back home

The ‘boomerang generation’ is putting their parents’ retirement at risk. Jessica Beard reports

The growing trend of adult children returning home will explode this year as the cost of living crisis forces more young people to rely on their parents.

More than 400,000 households have already had to accommodate returning grown- up children as a result of the pandemic, according to Legal & General, the insurer. However, experts have warned that thousands more will move home as finances are ravaged by inflation.

The additional burden of funding previously self- sufficient young adults could derail retirement plans for elderly parents.

Such millennials have been called the “boomerang generation”. Emma Byron of Legal & General said: “During the pandemic a lot moved home because of loneliness, but this year it will be out of financial necessity.”

Jonathan Cribb of the Institute for Fiscal Studies, a think tank, warned that sky-high house prices, more expensive mortgages, ever-increasing rents and rising day-to- day costs and bills would drive more and more young adults back to the safety of their parents.

“We expect people to move home particularly because the main shock has come from gas and electricity prices, which are easy to reduce by living with other people,” he said.

He warned this would be a huge cultural shift for many parents. “We are not Italy, where vast numbers of people live with their parents and it is part of the culture. But more people in Britain will be forced to live with their parents than in past generations.”

More than 3.6 million 20 to 34-yearolds were living with their parents in 2021, according to the Office for National Statistics. Research has shown that young men are far more likely to return to the family home. A third of all 20 to 34-year-old men live with their parents, compared with just one in five women. Half of 24-year- old men live at home, while just 35pc of women that age do.

Catherine Crane, 53, from Cardiff, said her 26-year- old son and his wife had been living with her and her husband for 18 months.

Mrs Crane said the couple moved home in October 2020 during the pandemic, cutting short their travels in New Zealand, where they each had found temporary jobs. The pair have been living rent-free at home and do not pay towards bills or food. Mrs Crane said she gave them spending money and cash for fuel.

“They aren’t really saving much money and I don’t take anything from them because I would rather they save whatever they can so they can push on in life. They are not where they thought they would be at their age,” she said.

Her son has done odd jobs while his wife is a personal trainer, a profession that so far has not afforded a secure income, Mrs Crane added.

“It takes an adjustment because when you reach your 50s and 60s you expect to have more disposable income and be able to save as much as possible for retirement,” she said. “Food and fuel cost the most – I’m spending a lot more money on that. It is quite scary how much prices are rising, even things like pasta.”

The weekly shop now comes to between £250 and £300, Mrs Crane said. The family home was refurbished to give separate living spaces to the young couple, with an extra shower added. This was at the parents’ expense, she said.

The newly-weds had planned to get their own home, but can no longer afford to as bills soared and inflation picked up. This week the ONS said the consumer price index hit 7pc in March, the highest since 1992. “They have had to put their plans on hold again. We have laughed about where we put the grandkids,” she said.

Rebecca O’Connor of Interactive Investor, a fund shop, warned that parents would have to use money to support adult children that would otherwise have been for retirement.

This has increased the risk of parents running out of savings and living in poverty in later life. “Very early on into stopping work, or even pre-retirement, is the worst time to take large chunks out of your pension. Inflation is high, the stock market is volatile and interest rates are rising,” Ms O’Connor said.

“Adult children moving back home puts a large strain on parents but they probably don’t realise because of an assumption that your parents are always OK financially.”

Andrew Tully of Canada Life, a pension firm, said as well as “boomerang” children, the ability of young adults to leave their parents in the first place had also been severely hampered.

He said: “Rocketing living costs alongside the ever-increasing cost of housing, whether that’s for purchase or renting, mean even more young people will have no choice but to remain in the family home.”

Kathleen Henehan of the Resolution Foundation, a think tank, said a spike in children returning home would “shine a spotlight on the financial barriers young people face”. She said ever-increasing mortgage costs and high-priced but low-security renting would need to be solved, otherwise the burden would be passed on to elderly parents trying to save for retirement.

‘They are not where they thought they would be at their age’