High cost to parents of young adults living at home revealed

The "Peter Pan" generation of young adults who are yet to move out of the home they grew up in is costing parents an extra £1.2 billion a year collectively, a report estimates.

Parents with grown-up children who are still living at home spend an extra £456 on them a year compared with "empty nesters", according to the Centre for the Modern Family think-tank, which has been set up by pensions provider Scottish Widows.

The research found that as well as shouldering the cost of their child's basic bed and board, parents are also forking out for services used by their adult children such as Netflix, as well as for their mobile phone bills, holidays, haircuts, clothing and even beauty treatments.

The study found those with children over 18 who are still living under their roof are spending £122 a month typically on their grown-up children, compared with £84 a month for their empty nest counterparts - adding up to annual difference of £456 a year.

If the findings were projected across the UK, this would mean parents with a "full nest" of adult children are spending £1.2 billion more on their offspring compared to parents whose children have flown the nest.

One in five (20%) full nesters think their children would not be able to cope financially if they did not give them money, compared with 8% of empty nesters.

The research among more than 2,000 people found one in five (21%) full nesters are still paying their child's phone bill, compared with 4% of empty nesters, while 19% are paying for them to go on family holidays, compared with 8% of empty nesters.

One in 10 (10%) full nest parents reported paying for subscriptions such as Netflix for their adult children, compared with just 1% of empty nesters.

The "bank of mum and dad" is also footing the bill for personal maintenance for adult children still living in the family home, with 15% of full nest parents paying for haircuts and beauty treatments. Nearly a quarter (23%) of full nest parents are still buying clothes for their adult children, compared with just 5% of empty nesters.

Some 13% of full nest parents believe that helping their children financially will have a significant impact on their retirement plans, compared to 6% of empty nesters.

Despite this, more than a third (35%) do not expect to ever get back the money they have given.

To make their finances stretch further, 8% of full nesters said they sometimes skip meals to save money, while 15% sell items online to raise extra cash.

Anita Frew, chairwoman of the Centre for the Modern Family said: "While it is heartening to see that the UK's families are so willing to support one another, we are in danger of nurturing a Peter Pan generation of children who are reliant on their parents well into adulthood for all types of spending - which could have a major impact on parents' finances for later life."