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Why are record numbers of young people living with parents?

 

The number of young adults living with their parents has increased by a quarter since 1996, Office for National Statistics figures show.

Many are blaming high house prices and growing youth unemployment forcing young people to remain in the family home. However, there is another reason behind this: financial literacy.

As a specialist financial education charity, working with young people in transitional phases, we find that many simply don’t know how to manage their money and make a move into or sustain independent living. Our trainers encounter this mainly through our Money Works intervention programme. According to the ONS, those staying at home include:

  • 49% of 20 to 24-year-olds
  • 59% of 20-year-olds.
  • 48% of 23-year-olds.
  • 22% of young Londoners.
Financial literacy, the ability to budget, understand contracts, banking and borrowing plays a huge part in building the confidence to fly the nest / comfort zone and a lack of these skills results in many returning to the doorstep of the bank of mum and dad.

 

Despite financial education becoming part of the National Curriculum this September, there are huge gaps in the expertise and time available as well as the limited age that will benifiet. We urge teachers and youth groups to bring in experts in these fields to maximise the impact of personal finance lessons and give young people these vital life skills.

There is however a counter argument against all this, that the trend of young adults NOT staying at home is a recent anomaly in the last few decades. Longer living ages and low growth have resulted in less inherited wealth meaning less can use this capital to make a move. Couple this with an erosion of a savings culture, the destigmitising of debt and fewer generous pension schemes, and you have where we are today. Powerful factors are at work but the role financial education can play in rectifying the increasing trend and preventing so many young adults living at home is undeniable.

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