Parents expect to support children into their mid-20s as housing costs bite
Parents of teenagers are typically expecting to support their children financially until they reach the age of 26, a survey has found.
And freeing up housing wealth by downsizing may be off the table for some - as one in 14 (seven per cent) parents expect to move to a bigger home so their children can continue living with them into adulthood.
Savings and investments firm M&G, which commissioned the research, warned that supporting children for longer may mean some families need to reassess their long-term financial planning.
The research involved a survey carried out by Opinium of 1,000 parents of 16 to 18-year-olds across the UK in April.
Opinium also surveyed 1,000 young people aged 16 to 18 in April.
Fewer than one in 10 (nine per cent) parents surveyed expect their children to be self-sufficient by the age of 21 while nearly a fifth (18 per cent) believe the "bank of mum and dad" will still be open when their children are aged in their 30s.
Nearly a quarter (24 per cent) of parents surveyed expect to help their children on to the property ladder with a deposit on their first home while a further 14 per cent anticipate supporting them longer-term with rent or mortgage payments.
Two-fifths (40 pere cent) of teenagers surveyed expect to postpone pension saving until their 30s, increasing the risk that their delayed financial independence will mean they save too little, too late for their retirement.
The extended support is also reshaping parents' own finances, which could also impact their retirement savings.
Nearly two-thirds (64 per cent) expect to make lifestyle changes to help their children financially, with 30 per cent cutting back on everyday spending and 31 per cent reducing holidays or luxuries.
Looking further ahead, one in seven (14 per cent) plan to delay retirement to continue providing support while 11 per cent are considering taking on an additional job.
M&G argued that a regular workplace pension health check could encourage people to review their pension circumstances. Matthew Ings , a chartered financial planner at M&G, said: "Supporting children into their mid-20s is becoming the norm, but it can come at a cost if it isn't planned for. Many parents are quietly absorbing that support over time, often at the expense of their own retirement savings.
"At the same time, if financial independence is delayed, there's a real risk that pension saving is delayed too. Financial independence is no longer a clear-cut milestone, and that makes it more important to step back and take stock.
"A pension health check can help people understand the trade-offs they are making, stay on track, and balance parents supporting their children today with protecting their own financial future."
M&G has been exploring how intergenerational conversations can reshape financial decision-making as part of its "reframing retirement" campaign, including a video series.
The figures come as research published by HSBC UK and Young Enterprise found that 48 per cent of people aged 16 to 24 have not put any money into savings in the past year. Nearly two-thirds (63 per cent) of people in this age group said they worry about spending money.
Sarah Porretta, of Young Enterprise, said: "What this research shows is a generation under real pressure - they have grown up through first the Covid pandemic and then cost of living challenges and are worried."