‘Bank of mum and dad’ staying open longer as parents sacrifice retirement plans to support children

Parents across the UK are increasingly expecting to provide financial support for their children well into their mid-twenties, with a new survey revealing the average age for anticipated independence is 26.

This extended reliance is even prompting some families to consider moving to larger homes, with one in 14 (7%) parents planning to upsize specifically so their adult children can continue living with them.

The research, commissioned by savings and investments firm M&G, highlights a significant shift in family financial dynamics.

Fewer than one in 10 (9%) parents believe their children will be self-sufficient by 21, while nearly a fifth (18%) anticipate the " bank of mum and dad " remaining open into their children's thirties.

Beyond day-to-day living, a quarter (24%) of parents expect to contribute to a deposit for their child's first home, and a further 14% foresee long-term assistance with rent or mortgage payments.

This prolonged financial commitment is reshaping parents' own financial futures, potentially impacting their retirement plans. Almost two-thirds (64%) are prepared to make lifestyle adjustments, with 30% cutting back on everyday spending and 31% reducing holidays or luxury purchases.

Parents expect to financially support their teenage children until they are into their mid-twenties (Alamy/PA) (Alamy/PA)

Looking further ahead, one in seven (14%) intend to delay their retirement to maintain support, and 11% are considering taking on an additional job.

The ripple effect extends to the younger generation, with two-fifths (40%) of teenagers surveyed admitting they expect to postpone pension saving until their thirties.

This delay risks them saving too little, too late for their own retirement. The findings are based on a survey conducted by Opinium in April, involving 1,000 parents of 16 to 18-year-olds and an equal number of young people in the same age bracket across the UK.

Matthew Ings, a chartered financial planner at M&G, warned that while "supporting children into their mid-20s is becoming the norm, it can come at a cost if it isn’t planned for."

He added: "Many parents are quietly absorbing that support over time, often at the expense of their own retirement savings. At the same time, if financial independence is delayed, there’s a real risk that pension saving is delayed too."

Mr Ings emphasised the need to "step back and take stock" as "financial independence is no longer a clear-cut milestone”, suggesting a regular pension health check could help families "understand the trade-offs they are making, stay on track, and balance parents supporting their children today with protecting their own financial future."

M&G, which is exploring intergenerational financial conversations as part of its "reframing retirement" campaign, stressed the importance of reassessing long-term financial planning in light of these evolving family dynamics.