Home truths
As the number of young adults living with their parents increases, families with the least resources are finding themselves penalised. According to a new study released today [19 October], over six in ten single 20-34-year-olds without children now live with their parents (a total of 3.5m people in the UK). This trend is reflected across the income spectrum. However, the benefits system penalises parents on lower incomes, reducing their benefit payments if their adult children live at home, squeezing living standards. In addition, young people have been hardest hit by increased unemployment as a result of the pandemic, and early evidence suggests there is a further increase in the numbers moving back in with their parents.
The study by a team at Loughborough University, funded by Standard Life Foundation, is the first which takes a comprehensive look at the living standards of low-to-middle income families in what is becoming a ‘normal’ life stage for young people: living with parents during their 20s, and sometimes beyond. It found that between 2008/09 and 2017/18, the proportion of single 20-34 year olds without children who lived with their parents grew from 55% to 63%. Single young adults are most likely to be living with their parents in their early 20s (71%), but a majority still live in the parental home in their late 20s (54%), before a decline among those in their early 30s (33%). In Asian families, young adults tend to live at home for much longer.
The trend affects all income groups
Researchers looked into the likelihood of different socio-economic groups living in the parental home and found that more and more young adults from across the socio-economic spectrum are living at home with their parents, with multiple factors influencing who does so. Common influences include the precarity of young adults’ labour market experiences and the high cost of housing. Whilst all are affected, some young people (those facing economic difficulties) are more in need of living in the family home, but this is highly dependent on the resources parents have to help them.
Parents living in the private rented sector least likely to be able to help
Parents with good jobs and those with stable housing (i.e. not privately renting) are more likely to have their sons and daughters living with them in their 20s and early 30s. This is due to people in the private rental sector generally having less space and resources to help their children. A growing number of families with dependent children are in private rented housing: the proportion living in such homes rose dramatically from one in twelve twenty years ago, to one in four today. As children in such families reach adulthood, their parents are likely to struggle to provide them with accommodation when they need it.
Those families claiming benefits, tax credits and Universal Credit face significant financial losses
A low income family with a young adult living at home is entitled to fewer benefits than one supporting a dependent child. In some cases, this can be compensated for by the young adult’s earnings, although parents can still lose out, depending on how much their grown-up children contribute to family expenses. For non-working families, overall income falls dramatically once a child has completed secondary school, including a reduction in Housing Benefit that assumes the young adult will contribute to the rent. The total combined benefit income for a couple with one child is £25 a week lower if they are aged 24 than aged 14. However, the minimum cost of living is greater for the first of these families, because a 24-year-old lives a more independent life than the teenager (for example, going on holiday and socialising separately). This adds £65 a week to the combined minimum costs of the household. On this basis, the study estimates that a family relying on benefits is £90 a week worse off, relative to their required spending, with a son or daughter in their early 20s compared to with a dependent child.
Katherine Hill, Lead Researcher, said:
“Children living at home well into their 20s is not a temporary phenomenon, it’s here to stay. A lot of young people will spend most of a decade of their lives living like this. Government needs to respond to this not just by helping people get on the housing ladder, but also ensuring they do not increase the strain on already-stretched families by penalising them through the benefits system. As a start, they should stop deducting housing benefit from parents who live with sons and daughters who do not have sufficient earnings to pay rent.”
Mubin Haq, CEO, Standard Life Foundation, said:
“Too often the growing demographic trend of young people living with their parents is seen through a middle-class lens. But for families on lower incomes there’s a real danger of living standards being squeezed. Young people’s employment has been hit hardest by Covid and increasingly more are returning to live with their parents. The state assumes young adults will contribute to family rent , but gives them no support to do so. Moreover, it cuts parent’s benefit entitlements. Doing the right thing by your children shouldn’t lead to increased risk of hardship. “
