UK mums and dads issued new £15k warning over giving children too much money

Adults in the UK who receive significant sums of money from the ‘Bank of Mum and Dad’ have worse everyday financial habits than those who don’t, new research suggests.

Those who still live at home with their parents are more likely to have received financial support (14 percent vs 10 percent for those who didn’t receive money).

Additionally, they could be “more prone” to running up credit card debt (21 percent vs 19 percent) and are less likely to have an emergency savings fund in place to cover their outgoings if their income is disrupted (19 percent vs 21 percent).

The research from Wealthify surveyed 2,000 people from across the nation to uncover how financial help from parents affects adult children’s financial habits and found that nearly one in five adults receive a ‘lump sum’ of savings from their parents when they reach adulthood.

This is the equivalent of over nine million people, with the average amount coming in at £15,314.48.

Adults who received a lump sum of savings from their parents took longer to reach financial independence than those who didn’t, at an average age of 22 years and three months compared to 20 years and nine months.

Andy Russell, CEO at Wealthify commented: “Unlike their parents, young people today delay milestones like having their first child, buying their first home, or getting married much later in life due to the need to build up their finances.

“Financial independence can feel like a faraway dream for those facing low starting salaries and high living costs. And while parents help out where they can, it’s important that young people have their own security net to fall back on.”

The research shows the ages for financial independence from parents vary across the UK.

In Northern Ireland, financial independence from parents is reached at roughly 19 years and 10 months old – the youngest age in the UK.

Comparatively, those in the South East take the longest to become financially independent, at an average age of 21 years and eight months old.

Mr Russell continued: “This is where an emergency savings pot comes in. Having money set aside in case life happens and things go wrong - especially the unexpected things, like your car breaking down, facing a sudden redundancy at work, or becoming unwell for a long period of time - is key to financial independence.

“That way, you can still work towards your long-term financial goals without receiving a hit to your finances that knock you off kilter.”

“Usually, the rule of thumb is to have three to six months’ worth of outgoings behind you, and it’s generally advised to keep your emergency savings in a savings account that is out-of-sight but still easy to access.

“It makes sense to get into good savings habits and there are many accounts on the market to help you do that.”