The boomerang generation

While many parents will be waving their kids goodbye as they head off to university this month, spare a thought for the growing number of parents whose children have just graduated and are now back home.

Last year, more than 3.3 million adults in the UK aged between 20 and 34 were living with a parent or parents – 26% of this age group – according to latest figures from the Office for National Statistics (ONS).

The number of young adults living with their parents has risen by 25% since 1996, the earliest year for which comparable statistics are available.

Financial impact

As well as the pressure that this boomerang effect puts on family relationships, it can have a negative impact on the Bank of Mum and Dad.

Parents pay, on average, £70.21 a month on outgoings such as food, petrol and energy bills for their stay-at-home "kidults" – that's almost £850 a year added to household bills – according to VoucherCodes.co.uk.

The website revealed that one of the main reasons behind the high number of adult children still at home was unemployment, with 31% living at home temporarily while out of work. But it's not necessarily a short-term fix – more than a third of adult children living at home admit they had no intention of moving out.

Lack of job prospects

Unemployment certainly plays its part in why young adults end up living with parents. Some 8% of graduates were unemployed six months after graduating from UK universities in 2013, according to latest figures from the Higher Education Statistics Agency (Hesa).

Even when graduates do find work, it is not necessarily well paid. Research last year by the ONS found that 47% of graduates were in non-graduate jobs, while Hesa says the average salary was £21,000 last year for those in full-time employment – hardly enough to pay rent, let alone get on the property ladder.

One of the main reasons why young adults stay at home is that they simply can't afford to rent. At £862 a month, the average cost of renting a home in the UK is 6.3% higher than it was a year go, according to latest figures to June 2014 from the HomeLet Rental Index.
Move to London, as many graduates do to find work, and rents are 11.2% higher than they were in June 2013, with rents averaging £1,412 a month.

With typical rental deposits of four to six weeks, would-be tenants will need to save hundreds, if not thousands, of pounds before they can move into rented accommodation.

Payng their way

Admittedly, if your children are unemployed it is hard to ask them to contribute towards the cost of living at home. But once they start earning, there is an argument for expecting them to make a financial contribution. It will promote independence and prepare them for budgeting for rent or mortgage payments once they move out.

More than a third of young adults who are working but live at home admit they don't contribute to household bills, according to a survey earlier this year by VoucherCodesPro.co.uk. When asked why they don't contribute, more than half said their parents "never asked" and a fifth said they felt they "shouldn't have to".

Visit forums at Mumsnet and you'll find lively discussions on the subject. A post asking "How much do I charge my 20-year-old to live at home?" received a mixed response but the general consensus was that they should make some financial contribution.

One post said: "I don't understand the view that grown-up and earning children should be able to live Scot-free in a family without contributing at least a token amount. I think it sends a very strange message that I should spend every penny of the meagre salary I earn on bills, food, household maintenance but my adult offspring should live in the household and keep their entire income to themselves for treats."

Another added: "No wonder we have so many young people who can't cope on their own if their parents feel that at 20 years old they should still financially provide everything for them."

Mumsnet editor Sarah Crown says: "There's no question that, economically speaking, today's young adults have things tougher than their parents' generation. From university tuition fees to rising house prices, the financial pressures on young people today are intense and, as a result, many more are finding themselves living at home for longer.

"Mumsnet users broadly agree that if grown-up children do ask to stay with their parents while they're getting on their feet, charging them a small amount of rent, based on their income, is a sensible idea; it helps move the relationship on to a more equal footing – and, of course, as adults, they should expect to contribute to household expenses.

"This is a new and different landscape for parents and children alike, and we're all working out how best to navigate it."

Suzie Hayman, agony aunt, family counsellor and spokesperson for Family Lives (familylives.org.uk), a charity that offers support to parents, firmly believes that stay-at-home adult children should pay their way.

"You need to have a conversation about money," she says. "The point here is not just that you have to pay the bills but it's also about preparing for the future. If they're going to have a home of their own, they have to learn how to budget. And that means they need to look at any money they have and recognise that some has to go on bills, some has to be saved for future contingencies and only then can they spend the rest."

Come to an agreement

It's also important to set out ground rules for how the new household arrangement will work will right from the start.

"One issue can be that kids who come back from university after what they think has been a hard time want a rest, and the initial return may seem like a holiday. You can all slip very easily back into the dependent relationship you had before they went away," says Hayman.

"Now they're grown-ups, they want to live their own lives but you need to have a new agreement about how this will work. For example, while they don't have to ask permission anymore about coming and going, out of courtesy they should tell you if they plan to stay out overnight or are not coming back for dinner."

One of the main causes of friction when 20-somethings live at home is that they don't pull their weight.

Hayman advises: "If you haven't asked them to do chores as a teenager, now's the time to start. Once or twice a week, they should plan, buy, make and serve the evening meal – all good practice for the future. If they have got into bad habits at university, it's time to get them back in line.

"It's really important not to infantilise your children. If they are being difficult, you do have to ask yourselves, with biscuits in the tin and meals on the table, how are you helping them leave when you are making it so comfortable for them to stay?"

The true cost of going to university

The typical student will come out of university more than £44,000 in debt, according to recent research by the Institute of Fiscal Studies. Researchers estimate that a middle-earning graduate will still owe around £39,000 at today's prices by the age of 40m and will have to pay back around £1500 a year throughout their 40s. Even by age 50, they will owe around £32,000 though any remaining debts will be written off a year later.

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