A new report out today shows how 3.5 million single young people, without children, are now living with their parents.
The study by Loughborough University shows how these 20 to 34-year-olds are being hard hit by the unemployment caused by coronavirus – a crisis which is likely to increase according to experts.
This ‘boomerang generation’ trend is reflected across the whole of society in the UK.
However, the report also details how low-income families are expected to feel the pinch worst of all, which could happen if their benefit payments are reduced due to adult children still living at home.
“A lot of young people will spend most of a decade of their lives living like this.
“Government needs to respond to this not just by helping people get on the housing ladder, but also ensuring they do not increase the strain on already-stretched families by penalising them through the benefits system.
“As a start, they should stop deducting housing benefit from parents who live with sons and daughters who do not have sufficient earnings to pay rent.”
The study, funded by Standard Life Foundation, is the first which takes a comprehensive look at the living standards of low-to-middle income families in what is becoming a ‘normal’ life stage for young people: living with parents during their 20s, and sometimes beyond.
It found that between 2008/09 and 2017/18, the proportion of single 20 to 34-year-olds without children who lived with their parents grew from 55% to 63%.
Single young adults are most likely to be living with their parents in their early 20s (71%), but a majority still live in the parental home in their late 20s (54%), before a decline among those in their early 30s (33%).
In Asian families, young adults tend to live at home for much longer.
The trend affects all income groups
Researchers looked into the likelihood of different socio-economic groups living in the parental home and found that more and more young adults from across the socio-economic spectrum are living at home with their parents, with multiple factors influencing who does so.
Common influences include the precarity of young adults’ labour market experiences and the high cost of housing.
Whilst all are affected, some young people (those facing economic difficulties) are more in need of living in the family home, but this is highly dependent on the resources parents have to help them.
Parents living in the private rented sector least likely to be able to help
Parents with good jobs and those with stable housing (i.e. not privately renting) are more likely to have their sons and daughters living with them in their 20s and early 30s.
This is due to people in the private rental sector generally having less space and resources to help their children.
A growing number of families with dependent children are in private rented housing: the proportion living in such homes rose dramatically from one in twelve twenty years ago, to one in four today.
As children in such families reach adulthood, their parents are likely to struggle to provide them with accommodation when they need it.
Those families claiming benefits, tax credits and Universal Credit face significant financial losses
Low-income parents with a young adult living at home are entitled to fewer benefits than supporting a dependent child.
In some cases, this can be compensated for by the young adult’s earnings, although parents can still lose out, depending on how much their grown-up children contribute to family expenses.
For families without work, overall income falls dramatically once a child has completed secondary education or training, and can (with some exemptions such as those claiming disability benefits) include a reduction in Housing Benefit that assumes the young adult will contribute to the rent, even though their benefits do not include housing support if living at home.
The total combined benefit income for a couple with one child is £25 a week lower if they are aged 24 than aged 14 mainly because working age benefits for a 24 year old are less than Tax Credits and Child Benefit for a 14 year old.
However, the combined minimum cost of living is greater for the first of these families, because a 24-year-old lives a more independent life than the teenager (for example, spending on travel and socialising separately).
This adds £65 a week to the combined minimum costs of the household. On this basis, the study estimates that a family relying on benefits is £90 a week worse off, relative to their required spending, with an unemployed son or daughter in their early 20s compared with a dependent child.
Mubin Haq, CEO, Standard Life Foundation, said: “Too often the growing demographic trend of young people living with their parents is seen through a middle-class lens.
“But for families on lower incomes, there's a real danger of living standards being squeezed.
“Young people’s employment has been hit hardest by COVID and increasingly more are returning to live with their parents.
“The state assumes young adults will contribute to family rent, but gives them no support to do so.
“Moreover, it cuts parents' benefit entitlements. Doing the right thing by your children shouldn’t lead to an increased risk of hardship.”