How to handle home life in a difficult graduate job market: Sarah Coles

For those leaving school without a degree, the figures are even tougher: only 70% of those aged 21-30 have any job at all and 22% have highly skilled jobs. When graduates are unable to get highly skilled jobs, they’ll often turn to less skilled ones, which means those with fewer qualifications may be squeezed out – unless they already have the experience.

The opportunity to stand out in ways other than your qualifications or existing experience is diminishing. Often the first trawl of CVs won’t be done by a human, so it doesn’t matter how well you present yourself or how you stand out in person: a bot will bin your application based on pre-set entry requirements. While previous generations were told to keep CVs short and sweet, today’s young people are advised to bulk it up, listing as many skills as possible, so that an automated search stands more chance of finding the specific skills it’s looking for.

The difficult jobs market means the UK’s homes are packed with those in their late teens and early 20s who are desperate to move out and make a start, but stymied by a lack of opportunity. The question is what should their family do to help?

Of course, they don’t have to do anything at all. The young adult may be able to apply for Universal Credit, depending on their circumstances, and although living with parents will affect how much they receive, they may still be able to support themselves. If their family isn’t happy with them living at home, things can be much more difficult. They will need to make a homelessness application and if the council decides they could live at home, they may not get the help they need. It’s one reason why so many young people will end up living at home while they look for work.

If parents choose to provide a roof over their heads, this doesn’t come without costs. With more people to feed and house, bills will be higher, eating into the monthly budget. In many cases, parents are waiting for the empty nest, when bills fall and they can afford to super-charge their pension. If the nest isn’t emptying, this option may be closed off, so it could impact how and when parents retire. They may also have planned to downsize to support their retirement income, and be forced to hold off because their offspring is still living at home.

Parents are then faced with the question of whether they also want to offer financial support. If they’re not in a position to do so, this provides the easiest answer of all. They’re not duty-bound to put themselves in a financial hole in order to help their adult offspring.

It shouldn’t just ring alarm bells if you’re running out of money or building debts: missing your own financial milestones is reason enough to say no. I was speaking to a business owner a few weeks ago who said she couldn’t afford to pay into a pension because every spare penny was going into helping her daughter buy a home. She isn’t feeling the impact of that decision today, but a decade down the line she could come to seriously regret it.

If their own parents are more comfortable financially, the family could have conversations around any possible support available from the Bank of Gran and Grandad instead of the Bank of Mum and Dad. They may want to give money away at this stage because they’re concerned about a potential inheritance tax bill, so it means they can help their family when they most need it. However, there’s no compulsion for them to do so. Giving too much away can cause enormous problem for retirees if their circumstances change.

If anyone in the family is in a position to help, there’s the question of what the right kind of help might look like. There are no right and wrong answers, because it depends enormously on their circumstances, but there are some things to consider.

Financial support to put them in a more employable position may make sense – whether that’s help buying a car so they can commute to work, paying for training, or considering helping them fund a business start-up. Some parents will decide that their offspring needs to be in a different area in order to find the right work, so they will be prepared to pay rent and living costs for a specific period.

Some will be happy to step in for real emergencies if they’re on a low income, don’t have enough emergency savings, and are faced with a horrible cost out of the blue. If it keeps them safe or enables them to meet their commitments, they may be prepared to cover short-term costs.

However, some will worry that any support will stop their children being independent. It means that if you offer help, it’s a good idea to put specific boundaries in place – like how much you’re prepared to support them, what you expect them to do as their part of the arrangement, and how long you are prepared for this to last. You can be as prescriptive as you want, and they can accept help on that basis.

It’s incredibly difficult to get the balance right, but in an ideal world you can offer enough support for them to strike out on their own, so while the Bank of Mum and Dad can’t shut up shop completely, they at least won’t expect so many hefty withdrawals in future.

Do you know what an additional permitted subscription is?

There’s a little-known rule that means you can inherit an ISA wrapper from your spouse. If you hold cash or stocks and shares ISAs, and leave them to your spouse or civil partner, you pass on your ISA allowance to them too. This allowance is known as an additional permitted subscription.

It’s equal to the value of the ISA on the date of death, or the value of those assets once probate is complete – whichever is higher. It means a spouse or civil partner who is left assets that used to be in an ISA could wrap everything back up in this allowance immediately, without using up their usual annual allowance.

How people use these allowances on the HL platform is eye opening. Among those who transfer investments across, around one in seven make changes within the first fortnight. This can make sense if they have different objectives to their late spouse, but there’s a risk they’re driven by a lack of familiarity with investing.

At the other end of the spectrum, around half of people are still holding exactly the same portfolio as their spouse had a year later. This makes sense where a couple have planned together, but there’s a risk some investors haven’t made a change because they don’t feel they understand enough.

It’s why it’s so vital that whoever is left behind is armed with all the knowledge and support they need, whether that’s financial education or advice, so they make the decisions that are right for them.