Lump sums from the Bank of Mom and Dad make children more reckless with money
- A fifth of adults receive significant amounts of money from their parents when they turn 18
- Northern Ireland has the lowest age for financial independence in the country
Adult children who receive a significant amount of money from their parents become financially independent up to a year and a half later than others, research shows.
According to Wealthify, a fifth of adults receive a lump sum from their parents when they turn eighteen, receiving an average of £15,314.
The research shows that young adults who receive a significant amount of cash from their parents tend to have worse daily financial habits than those who do not.
On average, these adults are financially dependent on their parents until the age of 22 years and three months, compared to just 20 years and nine months for those who do not receive a lump sum.
Fast forward months: Northern Ireland has the youngest age of financial independence
The age at which people achieve financial independence also varies from country to country.
Despite this, Northern Ireland has the lowest age for financial independence in Britain, at 19 years and ten months.
Yorkshire & Humberside and the West Midlands together have the second lowest age at 20 years and five months, while adults in the North West become financially independent on average at 20 years and six months.
By comparison, the South East has the highest age for financial independence: 21 years and eight months.
This is closely followed by 21 years and seven months in London, 21 years and five months in the East of England and 21 years and four months in the South West.
Overall, the age at which young adults reach financial independence is rising, with the average age at which young people get their first job being 19 years old, compared to the age range of 16 to 18 over the past two decades.
In addition, the number of young adults entering higher education has reached 35.8 percent in 2023, compared to just 24.7 percent in 2006, although this is down from the peak of 38.2 percent in 2021.
This inevitably pushes up the age at which adults become financially independent of their parents and start working full-time.
Andy Russell, CEO of Wealthify, said: ‘Unlike their parents, young people today are delaying milestones such as having their first child, buying their first home or getting married much later, due to the need to shore up their finances. to build.
In 2024, only 39 percent of 25 to 34-year-olds will own their own home, compared to 59 percent in 2000. Despite this, home ownership has still peaked since 2010.
Russell added: ‘Financial independence can seem like a distant dream for those dealing with low starting salaries and high living costs. And although parents help where they can, it is important that young people have their own safety net to fall back on.
‘This is where an emergency piggy bank comes in handy. Putting money aside just in case life happens and things go wrong – especially the unexpected ones, like a car breakdown, sudden dismissal from work, or becoming unwell for a long time. time – is the key to financial independence.
“That way, you can still work toward your long-term financial goals without your finances taking a hit and throwing you off balance.”
‘Usually the rule of thumb is to have three to six months’ worth of expenses behind you, and it is generally recommended that you put your emergency savings in a savings account that is out of sight but still easily accessible.’