- A fifth of adults receive significant amounts from their parents when they turn 18
- Northern Ireland has the lowest age of financial independence in the country
By Harvey Dorset
UPDATED: 03:36EDT, June 15, 2024
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 claims.
A fifth of adults receive a lump sum payment from their parents when they turn eighteen, according to Wealthify, receiving an average of £15,314.
The study suggests that young adults who receive a significant amount of cash from their parents tend to have worse everyday financial habits than those who do not.
On average, these adults are in financial debt to their parents until they are 22 years and three months, compared to just 20 years and nine months for those who do not receive a lump sum.
Months ahead: Northern Ireland has youngest age of financial independence
The age at which people reach financial independence also varies by country.
Despite this, Northern Ireland has the lowest financial independence age in the UK, 19 years and ten months.
Yorkshire and Humberside and the West Midlands jointly have the second lowest age, at 20 years and five months, while in the north west adults become financially independent at 20 years and six months on average.
In comparison, the Southeast has the highest age of financial independence at 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 achieve financial independence is increasing: the age at which young people obtain their first job reaches 19 years on average, compared to between 16 and 18 years in the last 20 years.
Compounding this, the number of young adults entering higher education reached 35.8 percent in 2023, compared to just 24.7 percent in 2006, although this figure has fallen from its peak of 38.2. percent in 2021.
Inevitably, this raises the age at which adults become financially independent from their parents and enter full-time employment.
Andy Russell, chief executive of Wealthify, said: “Unlike their parents, young people today delay milestones such as having their first child, buying their first home or getting married much later in life due to the need to strengthen their finances.
In 2024, only 39 percent of people ages 25 to 34 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 facing low starting salaries and high costs of living. And while parents help where they can, it’s important for young people to have their own safety net to fall back on.
“This is where an emergency savings fund comes in. Having money set aside in case life happens and things go wrong, especially unexpected things like your car breaking down, facing a sudden layoff at work or feel 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 taking a hit to your finances that throws you off balance.
“Usually, the rule of thumb is to have three to six months of expenses behind you, and it’s generally recommended to keep your emergency savings in a savings account that’s out of sight but easy to access.”
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