1 of 2 parents still support adult kids
One out of every two parents across the globe supports children well into adulthood, with some of them unable to cut the financial umbilical cord even when their kids turn over 30.
These folks sometimes end up paying for their offsprings’ holidays.
Among the parents who support adult offsprings, however, 61 percent recognize that their children should already stand on their own feet financially, according to a new consumer research commissioned by HSBC.
The British banking giant’s “The Power of Protection Study, Facing the Future,” highlights of which were released on Friday, said one out of two parents globally were still supporting children over 18, and half of these were supporting those aged over 30.
Parents in Asia and the Middle East are generally far more likely to subsidize children into adulthood than those in Europe and the Americas.
The research showed that the United Arab Emirates had the highest proportion of parents who still supported grown-up children.
Education is the area where most parents (59 percent) provide financial support, while nearly half (49 percent) help with the cost of living such as utility bills, groceries and home repairs.
Even vacations
Parents also help with medical and dental care (33 percent), as well as rent or accommodation costs (27 percent). Over one in four (27 percent) even shoulder their children’s vacations.
The research represents the views of 13,122 people aged 25 and up who were surveyed by market research firm Kantar TNS across 13 countries and territories between March and May 2017.
“With parents supporting their children for longer, it is important to have a financial plan that considers competing priorities and future financial security,” Bryce Johns, Group Head of Insurance at HSBC, said in a press statement.
“Thinking about what is important in your life today, what you want to protect for the future and seeking professional advice are good first steps to putting a plan in place,” he added.
Kris Werner, head of retail banking and wealth management at HSBC Philippines, said the family was the “most important social group in Filipino culture” and it was “almost natural for Filipino parents to continue providing support to children even beyond 18 years of age.”
Werner noted that Filipino parents provided financial support most on education of their children, as well as for their utility bills, regular cash allowances, medical expenses and even travel.
“Therefore, it is important to have a financial plan in place to help provide for a more certain and secure future,” he said.
The research found that the majority of parents who support grown-up children feel good about helping their family, with 61 percent feeling appreciated for the assistance and 70 percent feeling they are a good provider for their family.
Financial planning
Providing this financial support comes at a cost, but it appears to be one that many parents prioritize. Parents spend an average of 37 percent of their disposable income to support their grown-up children and 56 percent spend less on themselves in order to leave more for their families.
Nonetheless, two-thirds (67 percent) are managing well financially.
The research, however, noted that there can be significant knock-on effects to parents’ long-term financial planning.
As much as 68 percent of the parents pay for their children’s college education at the expense of their own retirement fund, 26 percent withdraw from their own savings and investments to support an adult child, while 12 percent have incurred more debt.
Of the total respondents, 19 percent said their adult children would not manage at all financially if they themselves developed a long-term illness or disability if they had to significantly reduce their financial support to them (17 percent), or if they or their partner died (17 percent).
