Uni costs 'big parental expense'

group of students at work

University costs have replaced weddings as the big expense parents are most likely to face for their adult children, a report has found.

Two in five (40%) of parents said they had helped their grown-up child with university costs, while just one in five (21%) have contributed towards a wedding, according to the research by f inancial services provider Standard Life.
But for the grandparents' generation the situation was reversed, with two in five (41%) of grandparents saying they had helped with their child's wedding costs and one in four (25%) said they had paid towards their child's education.

The report said that social changes relating to marriage, higher numbers of people going to university and the increased costs of paying for university are all likely to have contributed to the shift.

Nearly one fifth (19%) of parents said they had helped to pay off their child's credit card or personal loan debt, showing a smaller proportion than nearly one third (28%) of grandparents who said they had helped to cover their own child's credit card or loan repayments.

Meanwhile, one in seven (14%) grandparents said they were also helping put money towards their grandchild's education. One in six (15%) grandparents said they had helped to fund their grandchild's first car.

The Family Financial Tree report, which interviewed more than 4,000 people to see how money flows up and down the generations, also raised concerns of a "conversation gap" about finances which could be holding people back from planning their future.

It found that while almost three-fifths (59%) of grandparents have written a will to benefit their children, less than half (45%) of grandparents have discussed inheritance with members of their family. Of those who discussed it, just under three-quarters (73%) raised the subject themselves.

More than a third (35%) of parents and 43% of grandparents also said they would not ask anyone in their family for advice about financial matters.

One fifth (22%) of families surveyed only discuss money when a problem occurs or an i mportant decision needs to be made. A similar proportion (18%) said that they only discuss family finances with their partner and not with anyone else within their wider family.

Julie Hutchison, Standard Life family financial expert, said: "Despite so many people being on the family payroll, there often seems to be a barrier when it comes to having certain conversations about money.

"But if some of the trickier discussions do take place, around such things as inheritance or retirement, they can help to remove uncertainty and make it much easier for everyone in the family to plan ahead and make the most of their money."

The report also found that many people are choosing to pass money down while they are still living, as household budgets remain under pressure amid stagnant wages and high living costs, .

One in 10 (10%) parents said they have passed on money to their children rather than waiting for them to inherit it and one quarter (25%) of grandparents have done the same for their adult children.

Recent research from the Office for National Statistics (ONS) found that three-quarters of assets recently left in wills has gone to just one fifth of Britons who received an inheritance.

The ONS report said that while rises in home ownership rates in recent decades should increase the number of inheritances as more people have assets to leave behind, the cost of caring for an ageing population is also likely to erode the size of people's windfalls.
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